Human Capital

work by Becker

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June 29, 2026

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Gary S. Becker, a Nobel laureate in Economics, applied economic principles to understand human behavior. His seminal work, Human Capital (1964), treats education and training as investments analogous to a company investing in machinery. Becker argued that rational, self-interested choices drive most human actions, extending beyond traditional economic decisions.1

He distinguished between "general" human capital, valuable to all employers, and "firm-specific" human capital, useful only within a particular company. Investments in human capital, such as education, are influenced by costs and expected returns, with wealthier families often able to subsidize these costs for their children. Ultimately, it is this accumulated human capital that holds value in labor markets.2

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Gary S. Becker
In Human Capital (1964), he argued that an individual’s investment in education and training is analogous to a company’s investment in new machinery or equipment. In studies such as A Treatise on the Family (1981), Becker analyzed the household as a sort of factory, producing goods…
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In Human Capital (1964), he argued that an individual’s investment in education and training is analogous to a company’s investment in new machinery or equipment. In studies such as A Treatise on the Family (1981), Becker analyzed the household as a sort of factory, producing goods…
Read More