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The Trouble with Human Capital Theory

Blair Fix
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Blair Fix: York University

No ax6k7, SocArXiv from Center for Open Science

Abstract: 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.

Date: 2018-08-15
New Economics Papers: this item is included in nep-hme and nep-hpe
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:ax6k7

DOI: 10.31219/osf.io/ax6k7

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