Showing papers on "Human capital published in 1974"
Book•
01 May 1974
TL;DR: In this article, the authors analyzed the distribution of worker earnings across workers and over the working age as consequences of differential investments in human capital and developed the human capital earnings function, an econometric tool for assessing rates of return and other investment parameters.
Abstract: Analyzes the distribution of worker earnings across workers and over the working age as consequences of differential investments in human capital. The study also develops the human capital earnings function, an econometric tool for assessing rates of return and other investment parameters.
8,587 citations
Posted Content•
TL;DR: In this paper, it is recognized that an individual's use of time, and particularly the allocation of time between market and nonmarket activities, is also best understood within the context of the family as a matter of interdependence with needs, activities, and characteristics of other family members.
Abstract: It has long been recognized that consumption behavior represents mainly joint household or family decisions rather than separate decisions of family members. Accordingly, the observational units in consumption surveys are "consumer units," that is, households in which income is largely pooled and consumption largely shared. More recent is the recognition that an individual's use of time, and particularly the allocation of time between market and nonmarket activities, is also best understood within the context of the family as a matter of interdependence with needs, activities, and characteristics of other family members. More generally, the family is viewed as an economic unit which shares consumption and allocates production at home and in the market as well as the investments in physical and human capital of its members. In this view, the behavior of the family unit implies a division of labor within it. Broadly speaking, this division of labor or "differentiation of roles" emerges because the attempts to promote family life are necessarily constrained by complementarity and substitution relations in the household production process and by comparative
1,791 citations
TL;DR: In this article, it is recognized that an individual's use of time, and particularly the allocation of time between market and nonmarket activities, is also best understood within the context of the family as a matter of interdependence with needs, activities, and characteristics of other family members.
Abstract: It has long been recognized that consumption behavior represents mainly joint household or family decisions rather than separate decisions of family members. Accordingly, the observational units in consumption surveys are "consumer units," that is, households in which income is largely pooled and consumption largely shared. More recent is the recognition that an individual's use of time, and particularly the allocation of time between market and nonmarket activities, is also best understood within the context of the family as a matter of interdependence with needs, activities, and characteristics of other family members. More generally, the family is viewed as an economic unit which shares consumption and allocates production at home and in the market as well as the investments in physical and human capital of its members. In this view, the behavior of the family unit implies a division of labor within it. Broadly speaking, this division of labor or "differentiation of roles" emerges because the attempts to promote family life are necessarily constrained by complementarity and substitution relations in the household production process and by comparative
1,702 citations
TL;DR: In this article, Hansen, Weisbrod, and Scanlon showed that IQ measures are related to human capital inputs in early childhood as well as to inherent genetic ability, and used them as a measure of ability and schooling.
Abstract: By the time children enter first grade, significant differences in verbal and mathematical competence exist among them.' These differences reflect variations in (1) inherent ability, and (2) the amounts of human capital acquired before the children reach the age of six.2 The stocks of acquired human capital reflect, in turn, varying inputs of time and other resources by parents, teachers, siblings, and the child. The process of acquiring preschool human capital is analogous to the acquisition of human capital through schooling or on-the-job training. Assuming a constant rental rate for human capital, earnings can be interpreted as a measure of capital stocks at later ages. The IQalso can be interpreted as such a measure of human capital stocks. It is related to some commonly used inputs of human capital, for it is well known that measured IQis not independent of years of schooling acquired before the age of testing. At preschool ages IQmeasures should be related to human capital inputs in early childhood as well as to inherent genetic ability. Viewing measured ability as an index of the stock of human capital puts a different light on earnings functions which include ability and schooling. If contemporaneous ability and schooling measures are used to predict earnings (as in Hansen, Weisbrod, and Scanlon 1970), it is not surprising to find that earnings are more closely related to an ability measure, which
563 citations
Posted Content•
TL;DR: In this article, the skeleton of a theory of marriage is presented, which assumes that each person tries to do as well as possible and that the "marriage market" is in equilibrium.
Abstract: I present in this paper the skeleton of a theory of marriage. The two basic assumptions are that each person tries to do as well as possible and that the "marriage market" is in equilibrium. With the aid of several additional simplifying assumptions, I derive a number of significant implications about behavior in this market. For example, the gain to a man and woman from marrying compared to remaining single is shown to depend positively on their incomes, human capital, and relative difference in wage rates. The theory also implies that men differing in physical capital, education or intelligence (aside from their effects on wage rates), height, race, or many other traits will tend to marry women with like values of these traits, whereas the correlation between mates for wage rates or for traits of men and women that are close substitutes in household production will tend to be negative. The theory does not take the division of output between mates as given, but rather derives it from the nature of the ma...
485 citations
TL;DR: In this article, the demand and supply of education in the United States are analyzed in the context of local public goods and the relations between local and other governmental bodies, and it is shown that education is both a public good and a private good.
304 citations
TL;DR: In this paper, the authors investigated the relationship between individuals' investments in formal education and on-the-job training and their labor-market productivity and found that, in addition to providing specific skills, formal education improves the individual's ability to acquire and assimilate information, to perceive and understand changing conditions, and to respond effectively.
Abstract: Studies of the returns to education have generally investigated the relationship between individuals' investments in formal education and on-the-job training and their labor-market productivity. It is well recognized, however, that other factors besides formal education and training contribute to a person's effective stock of human capital (and hence to productivity); these factors include early childhood environment, parents' behavior (see Dugan 1969), and associations with other individuals. There is general agreement, for example, that a child's development is affected by the ability and performance of peers in school. At a later stage, a significant part of an individual's college and graduate education appears to result from association with fellow students, the more able students contributing to the education of all. After formal schooling is completed, close associates are likely to continue to affect an individual's further educational development and to influence the rate of depreciation of the individual's stock of knowledge. One of the more persuasive explanations of the observed strong positive relationship between formal education and labor-market productivity is that, in addition to providing specific skills, formal education improves the individual's ability to acquire and assimilate information, to perceive and understand changing conditions, and to respond effectively.' From
162 citations
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155 citations
TL;DR: In this article, a revised Malthusian model is presented in which the value of human time and changes in that value are pivotal and limitations imposed by natural resources are mitigated by technological progress.
Abstract: This is an outline of a revised Malthusian model in which the value of human time and changes in that value are pivotal and limitations imposed by natural resources are mitigated by technological progress. Increased value of human time will result in fewer children per household with each child embodying greater investments in human capital. This investment will result in lower infant mortality and in greater productivity in the economically active years. This model predicts declining rates of population growth and declining rates of infant mortality.
130 citations
TL;DR: In this article, a method is developed by which one may compare the effects of work experience to those of aging per se, and the difference is then attributed to on-the-job training.
Abstract: During the past decade, much has been said about the role that on-the-job training plays in augmenting one's stock of human capital. Up to this point, little has been done to distinguish the effect of on-the-job training from that of aging on the increase in human wealth. The reason rests primarily on the fact that it is difficult to observe or even define in some appropriate way the amount of on-the-job training that an individual possesses. In this paper, a method is developed by which one may compare the effects of work experience to those of aging per se. The difference is then attributed to on-the-job training.
109 citations
TL;DR: A survey of research in the distribution of labor incomes in which human capital theory serves as an organizing principle can be found in this article, where the role played by individual and family optimizing decisions in human capital investments is brought back within the mainstream of economic theory and within its analytical and econometric tools.
Abstract: The traditional studies of income distribution, a field with which economists are becoming increasingly concerned, must be described as basically sociological. The ascendancy of the human capital approach can be viewed as a reaction of economists to this non-economic, though certainly not irrelevant, tradition. In stressing the role played by individual and family optimizing decisions in human capital investments, important aspects of income determination are brought back within the mainstream of economic theory and within the power of its analytical and econometric tools. Human capital is not the only element of choice in the analysis of income distribution . Nevertheless, it appears that the subject of human capital investments lends itself to a more systematic and comprehensive analysis of wage differentials, than each of the other factors. The following is a description of research in the distribution of labor incomes in which human capital theory serves as an organizing principle. It is, in part, a sequel to my 1970 survey and, in part, a report of ongoing research of my own and of others.
TL;DR: The authors also acknowledge partial support from the Spencer Foundation through a postdoctoral fellowship at the University of Minnesota (Ben-Zion) and from a research grant of the American Telephone and Telegraph Company.
Abstract: *We are indebted to Gary Becker, Malcolm Burns, Richard Posner, George Stigler and Gordon Tullock, and to participants of the Human Capital Seminar at the University of Minnesota, for their helpful comments and suggestions. We gratefully acknowledge partial support from the Spencer Foundation through a postdoctoral fellowship at the University of Minnesota (Ben-Zion) and from a research grant of the American Telephone and Telegraph Company. We alone are responsible for the remaining errors.
01 Jan 1974
TL;DR: The Human Capital theory as discussed by the authors is a content theory of the economic value of higher education to its recipient or his employer, which is a "content" theory of a higher education.
Abstract: The Human Capital theory, as ordinarily defined, is a "content" theory of the economic value of a higher education to its recipient or his employer. But non-vocational higher education offers by definition no such content. So why does it yield a higher income? Various theories are examined: 1) The degree is an external test, vastly expensive to society but very cheap to individual employers; 2) The degree course forms character, and that is a kind of human capital; 3) The degree course exercises the mind, and develops it like a muscle; 4) The degree confers social status; 5) Insistence on a degree, including now vocational degrees, is a restrictive practice by many trade unions. People also seek non-vocational higher education because it is publicly financed. There is a "Robbinsian" supply curve of higher education facilities. This is profoundly irrational, but all parties react rationally to it. No evidence connecting degree certificates with income could distinguish between Human Capital and most of these other theories. Possible statistical tests are discussed.
TL;DR: In this article, a simple educational investment model is used to demonstrate that foregone earnings are not identical to schooling time costs, since students will sacrifice leisure as well as earnings, and a review of the foregone-earnings measures used in a number of major human capital studies is undertaken to determine the approximate bias in human capital formation and rate-of-return estimates resulting from this source.
Abstract: A simple educational investment model is used to demonstrate that, if students are subject to borrowing constraints, foregone earnings are not identical to schooling time costs, since students will sacrifice leisure as well as earnings. Direct measurement of schooling hours and work hours of young males reveals that at the high school level the bulk of school hours result from foregone leisure. A review of the foregone-earnings measures used in a number of major human capital studies is undertaken to determine the approximate bias in human capital formation and rate-of-return estimates resulting from this source.
TL;DR: In this paper, the authors investigated the effect of training on the earnings and occupational status of male workers and used these estimates to obtain private and social rates of return under various assumptions about direct and indirect (= time) costs of education.
Abstract: JOB skills and human capital are acquired by a variety of activities in diverse institutional settings, ranging from parental investment in children to on-the-job training at work places. The purchase of occupational training from for-profit 'proprietary' schools and institutes is a significant, often neglected, mode of obtaining skills.' In 1971, approximately 1.4 million students enrolled in proprietary schools to prepare for work in such areas as truckdriving, electronics, cosmetology, cooking, and floristry, to name just a few. The schools provide an important example of the competitive for-profit education of voucher and performance contract proposals. With recent concern about the allocation of educational resources between academic and vocational schooling,2 possible differences in the social rate of return to for-profit and academic training have obvious policy implications. This paper investigates proprietary school job training in the United States and its impact on the earnings and occupational position of male workers. Section I presents information about proprietary schools and their distinctive operating characteristics; Section II estimates the effect of training on the earnings and occupational status of male workers and uses these estimates to obtain private and social rates of return under various assumptions about direct and indirect (= time) costs of education. I. The Proprietary School Training Market
TL;DR: Kapital or Technologie? Eine Gegenuberstellung der Neofaktorproportionen-and NeotechnologieansAtze zur ErklArung des internationalen Handels is described in this article.
Abstract: Kapital oder Technologie? Eine Gegenuberstellung der Neofaktorproportionen- und NeotechnologieansAtze zur ErklArung des internationalen Handels — In dieser Arbeit wird die Frage behandelt, ob Technologie und technologischer Fortschritt durch das Hinzufugen von zusAtzlichen Variablen in die bekannten und eleganten neoklassischen Handelsmodelle adAquat erfaβt werden konnen oder ob die vielfAltigen ZusammenhAnge zwischen den Variablen, die die Technologie darstellen, und zwischen Technologie und komparativen Vorteilen erst prAzisiert werden mussen, um die Handelsstrome hinreichend erklAren zu konnen
Posted Content•
Journal Article•
Posted Content•
TL;DR: Schneider et al. as mentioned in this paper used the human capital model to estimate the rate of growth in personal income in the United States using a series of cross-sections in a single regression.
Abstract: Economists have accepted the view of personal nonproperty incomes as the returns to the quantity of human capital which the individual possesses. Numerous studies have estimated internal rates of return or rental rates to investments in human capital.' Several studies have used the basic human capital model in estimating the contribution of education to the growth in national income,2 while others have applied the concept to the analysis of the distribution of income.3 However, in the empirical estimation of parameters, most of these studies of growth and income distribution use either a single cross-section of data or else make separate estimates for each of a series of cross-sections. The main purpose of this paper is to estimate the rate of growth in personal income in the United States using a series of cross-sections in a single regression. A second purpose is to explore the effects of including a finite life correction in Johnson's earlier model, thus estimating internal rates of return rather than rental rates. Finally we examine the effects of alternative specifications of the on-the-job training (OJT) function.4 In general, these corrections are found to be minimal. After the biasing effects of exogenous growth is removed, the estimates of rates of return, depreciation, and OJT investment are in reasonable agreement with previous estimates. Moreover, the rates of depreciation are more reassuring than the very high rates previously estimated by Johnson (1969, 1970). The lifetime incomes by cohort implied by the parameter estimates exhibit some interesting and instructive peculiarities. The reduced estimate of the rate of depreciation results in net investment reaching zero at considerably older ages than with previous estimates. Because of the different rates of exogenous growth estimated for different schooling levels, the income patterns of those cohorts who were 20 years and 10 years of age in 1960 show lifetime incomes which do not increase monotonically with increasing schooling levels. We conclude that this must imply that the trends for middle-aged workers, which dominate the parameter estimates, cannot continue if * Assistant professor of economics and statistics, Southern Methodist University, and econometric analyst, Weyerhauser Company, Tacoma, Washington, respectively. The research for this paper was supported by the Department of Labor Manpower Development Grant 31-46-70-06 to Southern Methodist University. We are grateful to Theodore W. Schultz, William J. Haley, George Borts, and an anonymous referee for helpful comments on an earlier draft. However, we alone are responsible for remaining deficiencies. I See for example Gary Becker (1964, 1967), Giora Hanoch, Lee Hansen, Barry Chiswick, Becker and Chiswick, Johnson (1970), Jacob Mincer (1962). 2 See Theodore Schultz (1961), Edward Denison, and the critique by Mary Jean Bowman. In the applications of the human capital model to the analysis of growth, Bowman has emphasized the distinction between internal rate of return and rental rates to human capital. 3 See particularly Mincer (1970), and Mincer and Chiswick as well as the other papers in Schultz (1972). M Mincer (1970, 1971) claims some superiority in the fit to his data when he uses the exponentially declining form of the OJT investment function as compared to the linearly declining form used by Johnson (1969, 1970).
Book•
01 Jan 1974
TL;DR: In this article, an integrated strategy for investment in human capital that considers the potential contribution of all human capital inputs would assist in reducing past inefficiencies and inequities and increasing the returns to scarce resources.
Abstract: An examination of the nature of the educational production process reveals that nonschool inputs are usually stronger determinants of learning and behavior than are school inputs, which are insignificant beyond undefined threshold levels. Economic efficiency seems low, and the evidence suggests that employment effects are much less than previously estimated. Other investments may be more socially profitable than education. To increase the value of human capital with optimal use of resources will require significantly different approaches than are now being used in LDCs. Traits required by occupation as well as leisure need to be more systematically considered than they have in the past. An integrated strategy for investment in human capital that considers the potential contribution of all human capital inputs would assist in reducing past inefficiencies and inequities and increasing the returns to scarce resources.
TL;DR: In this article, the authors show that the quantity and quality of schooling received by individuals has a significant effect on the structure of personal earnings, since so much else besides formal schooling determines personal earnings.
Abstract: The theory of human capital rests fundamentally on the idea that people invest in themselves in a variety of ways in the sense that they incur present costs for the sake of future financial returns. An important manifestation of this phenomenon of self-investment is the act of choosing to stay on in school (and perhaps also the act of choosing one kind of school rather than another). To test the proposition that such decisions are in fact motivated by investment considerations, one has to show that the quantity and quality of schooling received by individuals has a significant effect on the structure of personal earnings. Since so much else besides formal schooling determines personal earnings, the test clearly calls for multivariate statistical analysis. And indeed the use of multiple-regression techniques to analyze the pattern of earnings in an economy has proved to be an important by-product of what has been aptly described as "the human investment revolution in economic thought." Most of these studies have been carried out on American data,' but a few brave souls have tried their hand on data
Posted Content•
TL;DR: A survey of research in the distribution of labor incomes in which human capital theory serves as an organizing principle can be found in this article, where the role played by individual and family optimizing decisions in human capital investments is brought back within the mainstream of economic theory and within its analytical and econometric tools.
Abstract: The traditional studies of income distribution, a field with which economists are becoming increasingly concerned, must be described as basically sociological. The ascendancy of the human capital approach can be viewed as a reaction of economists to this non-economic, though certainly not irrelevant, tradition. In stressing the role played by individual and family optimizing decisions in human capital investments, important aspects of income determination are brought back within the mainstream of economic theory and within the power of its analytical and econometric tools. Human capital is not the only element of choice in the analysis of income distribution . Nevertheless, it appears that the subject of human capital investments lends itself to a more systematic and comprehensive analysis of wage differentials, than each of the other factors. The following is a description of research in the distribution of labor incomes in which human capital theory serves as an organizing principle. It is, in part, a sequel to my 1970 survey and, in part, a report of ongoing research of my own and of others.
TL;DR: In this paper, the authors present an example of human resource accounting in action and its implications, showing that common omissions of human capital in valuation sheets have led to numerous evaluations of their causes and effects.
Abstract: Common omissions of human capital in valuation sheets have led to numerous evaluations of their causes and effects. Of even more value, however, is an example of human resource accounting in action and its implications.
TL;DR: In this article, the authors describe five economic linkages by which a university might promote regional development and discuss the possibility of enhancing the "amenity" and "expenditure" effects of a university.
Abstract: The paper describes five economic linkages by which a university might promote regional development. Both theory and empirical evidence are considered In general, the benefits of a university are found to dissipate too quickly outside of a local region to have very decisive local effects; however, there are exceptions which suggest ways to make the university a more powerful agent of regional development. Major attention is given to the possibility of enhancing the ‘amenity’ effects and the ‘expenditure’ effects of a university. Basic issues of cause-and-effect are also reviewed in light of their policy implications.
TL;DR: In this article, a critical review of the methods and theoretical assumptions of the economics of education is presented, focusing on the key concept of human capital and the treatment of the role of education in economic growth and income distribution.
Abstract: The article presents a critical review of the methods and theoretical assumptions of the Economics of Education. Special attention is given to the key concept of human capital and to the treatment of the role of education in economic growth and income distribution.
Book•
01 Jan 1974
TL;DR: The Conference on Population and Family Economics (CPFE) was held in June 1972 and June 1973 in New York, N.Y., US as mentioned in this paper, with a focus on family economics.
Abstract: Meeting: Conferences on Population and Family Economics, June 1972 and June 1973, New York, N.Y., US