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The trouble with human capital theory

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  • Fix, Blair

Abstract

Human capital theory is the dominant approach for understanding personal income distribution. According to this theory, individual income is the result of "human capital". The idea is that human capital makes people more productive, which leads to higher income. But is this really the case? This paper takes a critical look at human capital theory and its explanation of personal income distribution. I find that human capital theory's claims are dubious at best. In most cases, the theory is either not supported by evidence, is so vague that it is untestable, or is based on circular reasoning. In short, human capital theory is a barrier to the scientific study of income distribution.

Suggested Citation

  • Fix, Blair, 2018. "The trouble with human capital theory," Working Papers on Capital as Power 2018/07, Capital As Power - Toward a New Cosmology of Capitalism.
  • Handle: RePEc:zbw:capwps:201807
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    References listed on IDEAS

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    1. Avi J. Cohen, 2003. "Retrospectives: Whatever Happened to the Cambridge Capital Theory Controversies?," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 199-214, Winter.
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    9. repec:zbw:esmono:157973 is not listed on IDEAS
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    Cited by:

    1. Fix, Blair, 2019. "How the Rich Are Different: Hierarchical Power as the Basis of Income Size and Class," SocArXiv t8muy, Center for Open Science.

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    Keywords

    human capital theory; income distribution; critique; hierarchy; productivity; power;

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