The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Human Capital

  • Sherwin Rosen
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_743

Abstract

Human capital refers to the productive capacities of human beings as income producing agents in the economy. The concept is an ancient one, but the use of the term in professional discourse has gained currency only in the past twenty-five years. During that period much progress has been made in extending the principles of capital theory to human agents of production. Capital is a stock which has value as a source of current and future flows of output and income. Human capital is the stock of skills and productive knowledge embodied in people. The yield or return on human capital investments lies in enhancing a person’s skills and earning power, and in increasing the efficiency of economic decision-making both within and without the market economy. This account sketches the main ideas, and the bibliography is necessarily restrictive. For additional detail and alternative interpretations, the reader should consult the surveys by Blaug, Rosen, Sahota and Willis, which also present complete bibliographies.

JEL Classifications

J24 
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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Sherwin Rosen
    • 1
  1. 1.