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Human Capital Theory and Education

The notion of human capital in economics is associated with the names of the Nobel laureate Gary Becker (University of Chicago; born in 1930) and Jacob Mincer (Columbia University; 1922–2006). Their main contribution was to consider the decision to pursue schooling as an investment decision, which is different from consumption decisions.

Most students attend school because they are compelled to, especially at the early stages; however, a fraction of students may do so because they enjoy acquiring new knowledge or because of the social status associated with it. In both cases, we are unable to explain why a small proportion of individuals are willing to invest a large amount of money in order to attend prestigious colleges. Similarly, we are also unable to explain why ...

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