Human Capital Human capital is the accumulation of investments in people The most important type of human capital is education o Education represents an expenditure of resources at one point in time to raise productivity in the future College graduates in the U.S. earn almost twice as much as workers with a high school diploma
Human Capital • Human capital is the accumulation of investments in people. • The most important type of human capital is education. • Education represents an expenditure of resources at one point in time to raise productivity in the future. • College graduates in the U.S. earn almost twice as much as workers with a high school diploma
Average annual earnings by Educational attainment 1980 2000 en High school, no college g $36,430$36,770 College graduates $52,492$69,421 Percent extra for college grads+44%+89% Women High school, no college $21,969$24,970 College graduates $29,663$42575 Percent extra for college grads +35% +70%
Average Annual earnings by Educational Attainment 1980 2000 Men High school, no college $36,430 $36,770 College graduates $52,492 $69,421 Percent extra for college grads +44% +89% Women High school, no college $21,969 $24,970 College graduates $29,663 $42,575 Percent extra for college grads +35% +70%
Why has the gap in earnings between skilled and unskilled workers risen in recent years International trade has altered the relative demand for skilled and unskilled labor Changes in technology have altered the relative demand for skilled and unskilled labor Ability, Effort, and Chance
Why has the gap in earnings between skilled and unskilled workers risen in recent years? • International trade has altered the relative demand for skilled and unskilled labor. • Changes in technology have altered the relative demand for skilled and unskilled labor. • Ability, Effort, and Chance