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Understanding Human Capital and Employment for Future Success

Human capital, encompassing knowledge, skills, and training, plays a crucial role in determining income and employment opportunities. Investing in education, additional training, and skill development can enhance human capital. Analyzing graphs on education and income levels further highlights the correlation between human capital and earnings. By assessing current human capital and planning steps to improve future human capital, individuals can work towards achieving their financial goals.

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Understanding Human Capital and Employment for Future Success

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  1. LESSON 4 BACK TO SCHOOL PART 1 HUMAN CAPITAL AND EMPLOYMENT

  2. LESSON 4: BACK TO SCHOOL PART 1: HUMAN CAPITAL AND EMPLOYMENT LESSON OBJECTIVES STUDENTS WILL: 1. ASSESS THEIR CURRENT AND FUTURE HUMAN CAPITAL. 2. ANALYZE GRAPHS AND CHARTS RELATED TO EDUCATION. 3. UNDERSTAND THE RELATIONSHIP BETWEEN HUMAN CAPITAL AND INCOME. 2

  3. HUMAN CAPITAL AND EMPLOYMENT 3

  4. Lesson 4: Back to School HUMAN CAPITAL: INVEST IN YOURSELF Human capital is the knowledge, skills, and training that people possess. • There is a strong correlation between the level of a person’s human capital and that person’s income. • Invest in human capital by going to school, pursuing additional training, and developing skills. 4

  5. Lesson 4: Back to School YOUR HUMAN CAPITAL Current human capital Future human capital Areas and subjects in which you have a lot of knowledge Education Additional training Employment Other skills REFLECTION QUESTIONS • How does your current human capital differ from your future human capital? • What steps do you need to take to achieve your future human capital? human capital? 5

  6. Lesson 4: Back to School HOW LONG WILL IT TAKE TO EARN $1 MILLION? How much each year? (2015 Median Annual Salary) How many years to earn $1 million? Level of Education Less than high school diploma Estimate Actual Estimate Actual 39.0 $25,636 High school diploma $35,256 28.4 Some college, no degree 26.1 $38,376 Associate’s degree $41,496 24.1 Bachelor’s degree $59,124 16.9 Master’s degree $69,732 14.3 Professional degree $89,960 11.1 Doctoral degree $84,396 11.8 Source: Current Population Survey (U.S. Bureau of Labor Statistics, bls.gov/emp/ep_chart_001.htm) 6

  7. Lesson 4: Back to School GRAPH: HOW LONG WILL IT TAKE TO EARN $1 MILLION? YEARS TO EARN $1 MILLION BY EDUCATION LEVEL 45 40 35 NUMBER OF YEARS 30 25 20 Potential Estimate 15 Actual 10 5 0 LEVEL OF EDUCATION AND 2015 ANNUAL MEDIAN SALARY Source: Current Population Survey (U.S. Bureau of Labor Statistics, bls.gov/emp/ep_chart_001.htm ) 7

  8. Lesson 4: Back to School EARNINGS, UNEMPLOYMENT RATES, AND EDUCATION Source: Current Population Survey (U.S. Bureau of Labor Statistics, bls.gov/emp/ep_chart_001.htm) 8

  9. Lesson 4: Back to School TEEN UNEMPLOYMENT RATES Average Unemployment Rate by Year Unemployment Rate = Number of unemployed / Labor force Note: Labor Force = Number of employed + number of unemployed 30 25 Average Unemployment Rate 20 15 10 5 0 2003 6 2004 5.5 2005 5.1 2006 4.6 2007 4.6 2008 5.8 2009 9.3 2010 9.6 2011 8.9 2012 8.1 2013 7.4 2014 6.7 2015 5.3 16 years and over 16 to 19 years 17.4 17 16.5 15.3 15.7 18.7 24.3 25.8 24.4 24 22.3 19.5 15.6 Source: Employment Situation Historical Data (U.S. Bureau of Labor Statistics, bls.gov/cps/cpsatabs.htm) 9

  10. Lesson 4: Back to School IN SUMMARY Human capital is the knowledge, talent, and skills that people possess. Education can increase human capital and earning potential as well as decrease unemployment risk. 10

  11. Katrina’s Classroom was developed by a team of Senior Economic and Financial Education Specialists at the Federal Reserve Bank of Atlanta. Claire Loup, New Orleans Branch  Julie Kornegay, Birmingham Branch  Jackie Morgan, Nashville Branch For additional classroom resources and professional development opportunities, please visit www. frbatlanta.org/education 11

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