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The Elgar Companion to the Chicago School of Economics

The Elgar Companion to the Chicago School of Economics

Elgar original reference

Edited by Ross B. Emmett

Many know the Chicago School of Economics and its association with Milton Friedman, George Stigler, Ronald Coase and Gary Becker. But few know the School’s history and the full scope of its scholarship. In this Companion, leading scholars examine its history and key figures, as well as provide surveys of the School’s contributions to central aspects of economics, including: price theory, monetary theory, labor and economic history. The volume examines the School’s traditions of applied welfare theory and law and economics while providing a glimpse into emerging research on Chicago’s role in the development of neoliberalism.

Chapter 10: Human Capital, by Gary S. Becker: A Reading Guide

Pedro Nuno Teixeira

Subjects: economics and finance, economic psychology, history of economic thought, methodology of economics


Pedro Nuno Teixeira Introduction The metaphor of skilled people as a costly type of capital has faced troubled times since its first appearance. Until the mid-twentieth century most economists paid little attention to the economic analysis of education and hesitated in using ‘human capital’ as an analogy for skilled labor. Resistance came from a belief that education gave access to nice and well-paid jobs without enhancing people’s productivity, and because it seemed problematic and not realistic to regard qualified labor as a type of capital. The belief in education’s irrelevant role in labor market outcomes was strengthened by the fact that the economic study of labor markets was unconnected to the analysis of education. Accordingly, human capital research did not develop much during the first 150 years or so of the existence of economics as an independent subject of scientific inquiry. In the aftermath of the Second World War this situation changed, prompted by several developments that converged to give increasing prominence to the economic effects of education. One of those changes was the changing possibilities and interests in the research on personal income, namely the belief that it was possible to provide causal explanations for the distribution of income, and that education was a good candidate to be included among those potential explanatory factors. The second aspect was the postwar revival of growth debates that, alongside the expansion of educational systems in most Western countries, led to an increasing emphasis on the qualification of the labor forces as a...

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