The origin of the concept of Human Capital

In a paper I wrote some years ago I explained the origin of that concept of human capital as follows:

The term ‘human capital’ was initially controversial, but the analytical concept was not. The analysis of human capital has many famous parents and grandparents (Kiker 1966).

Sir William Petty published the first analysis of the value of human capital in 1690. There were sophisticated analyses of investments in education and training and their implications for wage differentials, labour productivity and occupational choice by Adam Smith in 1776, Alfred Marshall in 1890 and Milton Friedman and Simon Kuznets in 1945.

Richard Cantillon, John Locke, John Stuart Mill, Adam Smith and Karl Marx all proposed that training rather than natural ability was more important in understanding occupational wage differentials. Adam Smith and Alfred Marshall referred to education and training as capital investments in human beings.

Irving Fisher in 1912 and Arthur Pigou in 1928 pioneered the explicit use of the term ‘human capital’. Jacob Mincer, Theodore Shultz and Gary Becker popularised the use of the term in the mid-20th century. See Kiker (1966) for a history of the concept of human capital.

1 Comment (+add yours?)

  1. rduerr1
    Aug 01, 2015 @ 02:40:18

    Reply

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