The Doctrine of Human Capital - Labor Sociology

Human Capital Doctrine

Theodor Schultz (1902-1998) and his followers, who developed the concept of human capital, dealt with human abilities for work. Although the foundations of the theory of human capital were laid by W. Petty and L. Smith, the key role in its creation belongs to the Nobel laureate G. Becker, influenced by the publications of which the term "human capital" became widely used.

According to the daiy theory, the qualitative characteristics of the workforce, a person's ability to work, his skills, knowledge, skills can be viewed as a resource that can become a source of income for the household, enterprise and country.

It's important to remember!

F. Becker calls human capital a certain complex of acquired and inherited qualities, which includes education, knowledge gained in the workplace, health and other components.

Milton Friedman (1912-2006), who noted the importance of accumulating such capital in the process of increasing knowledge and skills, as well as by improving health and increasing the life expectancy of workers, had a great influence on the development of the theory of human capital by G. Becker.

Human capital is made up of the natural abilities of an individual and can be increased in the process of education, vocational training, the acquisition of work experience, i.e. in the process of general preparation, as a result of which total human capital accumulates, and specific training that contributes to the accumulation of specific human capital.

The costs of time, effort, equipment, materials and money needed for education and training are considered investments in human capital. Such investments will be economically viable, only if they bring a return, will pay off, i.e. if the education or training received will provide a higher level of income for the organization that carried out such investments, which should also entail an increase in the worker's salary. The essence of investment in human capital fully reflects the definition given by Campbell McConnell and Stanley Bru (born 1945).

Investments in human capital - is any action that increases the qualifications and abilities and, thereby, the productivity of workers. The costs that increase the productivity of someone else can be considered an investment, because the running costs or costs are realized with the expectation that these costs will be repeatedly compensated by the increased income stream in the future. & Quot; .

Thus, human capital finds its final expression in the amount of income that it brings as a result of investment.

The main conclusion to which G. Becker came, and later many other economists, was the realization that analysis of human capital helps to understand many patterns in the labor market and in the economy as a whole. The consideration of T. Schultz, G. Becker and their followers primarily as an object for investment and an income-generating resource was criticized by some researchers - economists and sociologists who occupy a tough moral and ethical position. This is understandable, because although labor is actually sold and bought on the labor market, which has many features of commodity markets, labor is a specific commodity. Thus, Karl Polanyi (1886-1964) called him a fictitious commodity, or, as it were, a commodity, because labor as a commodity is not ultimately created in order to be sold, since its subject is a person. This point of view, of course, is justified and has the right to exist, and its provisions will be properly taken into account in the process of managing human resources. However, from the economic point of view, the analysis of labor as an income-generating resource is fully justified by the need to solve the problem of achieving maximum efficiency of the organization's activities.

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)