SOCI 235 Lecture Notes - Lecture 28: Human Capital, American Medical Association, Cosmetology
10 Dec 2014
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Document Summary
The human capital interpretation of education and training: discussions of education and training are mainly framed in terms of human capital theory. Capital (plant and equipment) increases the productivity of labour. Employee skill can be upgraded through investments: education and training. So, human capital theory says that i) education and training increase labour productivity; and ii) education and training require investment: combine human capital theory with a theory of wages. The theory of wages says that they tend to be associated with employee productivity. So personal productivity-enhancing investments in education and training are likely to lead to higher wages: there is crude evidence that tends to support these theories. There is a strong association between education and earnings. The cross-national evidence doesn"t settle the issue of causation. It could be that as countries get richer their populations choose to consume more education.
