Gary S. Becker

Human capital : a theoretical and empirical analysis, with special reference to education

A diverse array of factors may influence both earnings and consumption; however, this work primarily focuses on the impact of investments in human capital upon an individuals potential earnings and psychic income. For this study, investments in human capital include such factors as educational level, on-the-job skills training, health care, migration, and consideration of issues regarding regional prices and income. Taking into account varying cultures and political regimes, the research indicates that economic earnings tend to be positively correlated to education and skill level. Additionally, studies indicate an inverse correlation between education and unemployment. Presents a theoretical overview of the types of human capital and the impact of investment in human capital on earnings and rates of return. Then utilizes empirical data and research to analyze the theoretical issues related to investment in human capital, specifically formal education. Considered are such issues as costs and returns of investments, and social and private gains of individuals. The research compares and contrasts these factors based upon both education and skill level. Areas of future research are identified, including further analysis of issues regarding social gains and differing levels of success across different regions and countries. (AKP)

Investment in Human Capital: A Theoretical Analysis

SOME activities primarily affect future well-being, while others have their main impact in the present. Dining is an example of the latter, while purchase of a car exemplifies the former. Both earnings and consumption can be affected: on-the-job training primarily affects earnings, a new sail boat primarily affects consumption, and a college education is said to affect both. The effects may operate either through physical resources, such as a sail boat, or through human resources, such as a college education. This paper is concerned with activities that influence future real income through the imbedding of resources in people. This is called investing in human capital. The many ways to invest include schooling, on-the-job training, medical care, vitamin consumption, and acquiring information about the economic system. They differ in the relative effects on earnings and consumption, in the amount of resources typically invested, in the size of returns, and in the extent to which the connection between investment and return is perceived. But all im-

A Theory of Competition Among Pressure Groups for Political Influence

This paper presents a theory of competition among pressure groups for political influence. Political equilibrium depends on the efficiency of each group in producing pressure, the effect of additional pressure on their influence, the number of persons in different groups, and the deadweight cost of taxes and subsidies. An increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers. This analysis unifies the view that governments correct market failures with the view that they favor the politically powerful: both are produced by the competition for political favors.

Human Capital, Effort, and the Sexual Division of Labor

Increasing returns from specialized human capital is a powerful force creating a division of labor in the allocation of time and investments in human capital between married men and married women. Moreover, since child care and housework are more effort intensive than leisure and other household activities, married women spend less effort on each hour of market work than married men working the same number of hours. Hence, married women have lower hourly earnings than married men with the same market human capital, and they economize on the effort expended on market work by seeking less demanding jobs. The responsibility of married women for child care and housework has major implications for earnings and occupational differences between men and women.

An Economic Analysis of Marital Instability

This paper focuses on the causes of marital instability. Section I develops a theoretical analysis of marital dissolution, incorporating uncertainty about outcomes of marital decisions into a framework of utility maximization and the marriage market. Section II explores implications of the theoretical analysis with cross-sectional data, primarily the 1967 Survey of Economic Opportunity and the Terman sample. The relevance of both the theoretical and empirical analyses in explaining the recent acceleration in divorce rates is also discussed.

Market Insurance, Self-Insurance, and Self-Protection

The article develops a theory of demand for insurance that emphasizes the interaction between market insurance, “self-insurance,” and “self-protection.” The effects of changes in “prices,” income, and other variables on the demand for these alternative forms of insurance are alalyzed using the “state preference” approach to behavior under uncertainty. Market insurance and self-insurance are shown to be substitutes, but market insurance and self-protection can be complements. The analysis challenges the notion that “moral hazard” is an inevitable consequence of market insurance, by showing that under certain conditions the latter may lead to a reduction in the probabilities of hazardous events.

Law Enforcement, Malfeasance, and Compensation of Enforcers

THE new economic approach to political behavior seeks to develop a positive theory of legislation, in contrast to the normative approach of welfare economics. The new approach asks why certain industries and not others become regulated or have tariffs imposed on imports or why income transfers take the form and direction they do, in contrast to asking which industries should be regulated or have tariffs imposed, or what transfers should be made.

The Endogenous Determination of Time Preference

We model a consumers efforts to reduce the discount on future utilities. Our analysis shows how wealth, mortality, addictions, uncertainty, and other variables affect the degree of time preference. In addition to working out many implications of the model, we discuss evidence on consumption, savings, equilibrium, and the dynamics of inequality. We claim that most ofthat evidence is consistent with the predictions of our approach.

Nobel Lecture: The Economic Way of Looking at Behavior

An important step in extending the traditional theory of individual rational choice to analyze social issues beyond those usually considered by economists is to incorporate into the theory a much richer class of attitudes, preferences, and calculations. While this approach to behavior builds on an expanded theory of individual choice, it is not mainly concerned with individuals. It uses theory at the micro level as a powerful tool to derive implications at the group or macro level. The lecture describes the approach and illustrates it with examples drawn from my past and current work.

Fertility Choice in a Model of Economic Growth

Altruistic parents make choices of family size along with decisions about consumption and intergenerational transfers. The authors apply this framework to a closed economy, where the determination of interest rates and wage rates is simultaneous with the determination of population growth and the accumulation of capital. Thus, they extend the literature on optimal economic growth to allow for optimizing choices of fertility and intergenerational transfers. The authors use the model to assess the effects of child-rearing costs, the tax system, the conditions of technology and preferences, and shocks to the initial levels of population and the capital stock. Copyright 1989 by The Econometric Society. (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.)