HUMAN CAPITAL THEORY: FORMATION OF SCIENTIFIC CONCEPT

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 HUMAN CAPITAL THEORY: FORMATION OF SCIENTIFIC CONCEPT

Journal Title: Економіка розвитку - Year 2012, Vol 61, Issue 1

Abstract

 The prerequisites of formation of the human capital theory as a scientific concept on the basis of analysis of works representatives of classical political economy, Marxism, neoclassical political economy are defined in the article. W. Petty first used the value approach to evaluating a person, estimated national wealth of England and made the first attempt to estimate the population of the country. A. Smith coined the term "economic man", brought the concept of productivity, and divided it into productive and unproductive. D. Ricardo placed emphasis on the need for market regulation of wages. J.S. Mill considered the problem of the cost of labor and demand for it, the differences in wages, productive and unproductive labor, the regulation of wages, poor relief, etc. K. Marx extended the concept of the dual nature of work, divided it into abstract and concrete, and gave a detailed description of the concept "labor". However, the portion of capital which is embodied in the labor force and that in the manufacturing process changes its value, Marx attributed to the variable capital. A. Marshall explained the differences in wages, depending on the health, abilities and skills of the employee, as well as time spent in training. A.C. Pigou used the concept "human capital" in the context of justifying the need for investing in people, worked out the theoretical foundations of the study of motives and characteristics of investment in human capital. J.B. Clark noted that the value of skilled labor is much higher than the unskilled. Yet in 1924 S.G. Strumilin substantiated the economic value of the most important factors of labor skills, performed the calculation of the efficiency of investment in learning for the period 1918–1923, compared the effectiveness of investments in learning, depending on the level of education.The basic conceptual regulations of the theory of human capital are allocated in the article. For example, T.W. Schultz distributed the capital on the human and material, substantiated the need to invest in human capital to gain revenue in the future. G.S. Becker substantiated the human capital as an economic category, identified the special and general investment in people, carried calculation of the cost-effectiveness of education, highlighted the investment aspects of the behavior of agents in the labor market, etc. J.A. Mincer performed an empirical analysis of income redistribution to explain differences in inequality and asymmetry of workers` revenues, the interpretation of a form of age-earnings profiles, the interpretation of differences in income distribution between regions and countries, etc. The methodological foundations of the theory of human capital are identified. They consist, in particular, in using the principles of rationality to all spheres of human activity, methodological imperialism and methodological individualism. The fundamental contradictions that arise in applying the theory of human capital are formulated, namely: 1) the limited use of the principles of rationality and methodological imperialism to the justification of government education, health, labor market development programs, etc., 2) the use of a purely economic approach to the analysis of all spheres of human activity that does not account for non-economic factors and constraints of human behavior under the current institutional structure, 3) lack of a unified methodological approach to assess non-monetary benefits of education. Due to this directions of resolving contradictions that have arisen with the development of the concept of human capital as a research program are proposed.

Authors and Affiliations

Olehivna Stryzhak

Keywords

EP ID EP114779
DOI -
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