human capital

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Related to Human Capital Theory: Human Capital Management

human capital

the productive investment of resources in human beings rather than in plant and machinery In economics, such investment in human resources is appraised in comparison with levels of economic return from other kinds of investment. Clearly, investment in human capital begins in the family and continues in school and HIGHER EDUCATION, and is also affected by such inputs as provision for health care.

As a body of economic theory and associated empirical research, the human-capital theory of G. Becker, Human Capital (1975), explains income differentials as, in part at least, a return to human capital, e.g. the correlation between the number of years of formal education and earnings is so explained. The conclusion is often reached by human capital theorists that the returns to education are high. Similarly, POVERTY is sometimes explained as arising from a lack of human capital.

Challenges to the arguments of human-capital theory arise from a number of different sources, especially that the returns associated with education in fact arise from other sources, i.e. education may act merely as a filter or 'S creen’, and native ability or family background actually account for a significant proportion of the correlations between education and earnings (see SCREENING AND SCREENING HYPOTHESIS). Compare FUNCTIONALIST THEORY OF SOCIAL STRATIFICATION. see also CULTURAL CAPITAL.

References in periodicals archive ?
Human Capital theory has also failed to work, or at least to work in the way that people came to expect.
In human capital theory this knowledge formulates ethical, political and social activities of educating ourselves in terms of exchanges often associated with expected returns in the future.
It uses human capital theory and resource-based theory to explain the influence of the four predictors.
Human capital theory is often discussed together with social capital theory (e.
Human capital theory is an important theory of labour economics that studies impact of different "human-capital" variables (such as work-experience, education and training variables) on the wage-rates.
Commonly associated with the work of Becker (1964), human capital theory idealises the labour market insofar as individual differences in terms of access and rewards are linked, among other factors, to higher levels of education and skill.
Additionally, human capital theory indicates that leaders with higher levels of human capital will receive pay premiums (e.
According to Olaniyan and Okemakinde (2008), one major problem in the application of the human capital theory is its failure to account for a growing gap between the level of knowledge gained and knowledge applied through a matching job.
These results provide support to the human capital theory explanation according to which education develops capabilities that increase worker's productivity.
Human capital theory and labour market segmentation (LMS) theory are two contrasting theories commonly invoked to study emerging labour markets and income inequality.
I use New Zealand as a case study of a neoliberal economic theory, Human Capital Theory (HCT), and the growing alliance with early childhood education (ECE).
The model developed in this paper draws on human capital theory to explain how newly founded business ventures achieve long-term growth and reduce their chances of failure.

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