Conference paper

The human capital factor: generating, attracting and retaining human capital in regional Australia

16 Feb 2017



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In the field of labor economics, human capital refers to the stock of knowledge or characteristics of a worker that contributes to their productivity. Investment in education and training of individuals can enhance their level of human capital and this will be valued in the market because it increases firms’ profits. Various researchers have looked at the intersection of migration and human capital suggesting that higher levels of human capital are found in cities and that areas with high levels of human capital act as an attractor for individuals with high levels of skills and education. This self-reinforcing process of attraction raises many questions in the context of Australia’s urban primacy, as it suggests that capital cities will enjoy a cumulative gain in human capital over time, potentially at the expense of non-metropolitan areas. Net flows of young adults from regional to metropolitan Australia reinforces the concentration of economic activity and a relatively young metropolitan labour force. At the same time, it has led to a gradual ageing of the population structure and a depletion of human capital in many rural communities, placing constraints for local development, particularly through skills shortages and difficulty attracting professional workers. This paper explores whether the loss of regional capital from regional areas is inevitable. It poses a number of questions for discussion such as: Are there non-traditional ways in which regional communities can access or generate human capital? Can human capital be enhanced via mobility rather than permanent migration?




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