The Trouble with Human Capital Theory

The Trouble with Human Capital Theory
Fix, Blair. (2018). Real-World Economics Review. No. 86. 10 December. pp. 15-32. (Article - Journal; English).

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Abstract or Brief Description

Human capital theory is the dominant approach for understanding personal income distribution. According to this theory, individual income is the result of “human capital”. The idea is that human capital makes people more productive, which leads to higher income. But is this really the case? This paper takes a critical look at human capital theory and its explanation of personal income distribution. I find that human capital theory’s claims are dubious at best. In most cases, the theory is either not supported by evidence, is so vague that it is untestable, or is based on circular reasoning. In short, human capital theory is a barrier to the scientific study of income distribution.

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Publication Type

Article - Journal


critique human capital theory income distribution hierarchy power productivity


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BN Region - North America
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Depositing User

Jonathan Nitzan

Date Deposited

10 Dec 2018 20:09

Last Modified

12 Dec 2018 09:14


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