Human-Capital Theory

Sounds interesting, right? Well it is! The Human-Capital Theory is defined as the education and training that an individual or group undergoes in an effort to to increase economic growth. Investing in human capital, similar to investing in higher education, is thought to improve economic growth. Just as I mentioned in the previous post, it is not feasible to assume that investing in education (human capital) will increase productivity.

There exists the inability to accurately measure certain aspects of cause of low/high productivity. Each individual is different and therefore will differ when it comes to personal characteristics, morals and values, and past experiences and so forth.

While I understand the premise behind human-capital, I must say that I am still a little confused about where I stand. On one hand, I agree that education and training do no guarantee increased productivity thus stimulating economic growth. But on the other hand, I regard education, specifically higher education, as something that all individuals should take part in. I think education combined with experience/training allows you to see things from a different perspective. I just feel like education is now being viewed as strictly a business and the outcome is to make the economy better. I think when you focus on such a large picture, you lose sight of what each individual can get out of it for themselves and not just for economic growth.

This is why I am confused because I can see how investing in human-capital can stimulate economic growth and benefit us all but at the same time it doesn't mean that everyone should be pushed to do so because then you begin having problems such as human-capital helping some people but not all.