Abstract

It is a big problem how to measure human capital accurately, which has puzzled economists for a long time. There is not an effective way to calculate the cost of human capital until now. In recent years, activity based-costing (ABC) and economic value added (EVA) have been well developed and applied in many industries in western countries. They are advanced theory of cost calculation and may provide us useful tools to measure human capital. The paper examined the cost characteristics of human capital with the theory of ABC. Key activities in the process of human capital’s development were defined. Resource costs were allocated accurately and the procedure of human capital’s calculation was proposed. It provides us a new idea to measure and manage human capital and will do some help in further studies.

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