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Human Capital
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Is University Worth It?
In this course, Dr Matt Dickson (University of Bath) explores the value of going to university and gaining a degree. In the first lecture, we think about human capital theory and how human capital can be defined. In the second lecture, we think about the factors which have influenced higher education participation from the 1960s to the end of the 20th century. In the third lecture, we think about how higher education has been financed, including a timeline of tuition fees and loans. Next, we think about factors which have impacted higher education participation in the 21st century. In the fifth lecture, we think about the value of a degree in terms of the earnings returns it can provide. In the sixth lecture, we think about some factors which can influence the earnings returns that a degree might provide. In the seventh and final lecture, we think about some factors, aside from earnings, that a higher education can impact. Photo by Brett Jordan on Unsplash
Human Capital
In this lecture, we think about human capital, focusing in particular on: (i) Becker’s human capital theory from 1964, which states that human capital is a capital like any other, and is the knowledge and skills which make people productive in the labour market; (ii) the theory of human capital, which says that it can be invested in to gain a return; (iii) education as a form of investment in human capital; (iv) the calculation made to assess the value of education in terms of increased earning potential, weighed against the cost of gaining the qualification; (v) questioning whether this rational calculation truly represents how people decide on the level of education to undertake.
Hi. My name is Matt Dixon.
00:00:06I'm an associate professor of Public Policy at the University of Bath.
00:00:08And today, I wanna talk about why do we invest in education in.
00:00:12So the idea of investing in education really goes back to
00:00:17the human capital theory of Becca from nineteen sixty for,
00:00:20and the idea is that human capital is a form of capital
00:00:24like financial capital or machines or any other form of
00:00:29productive capital we might have,
00:00:32but human capital is the knowledge and skills that we
00:00:35acquire that make us productive in the labor market.
00:00:38And the theory of human capital says that we can invest in that
00:00:42human capital, and it pays a return.
00:00:45Just like you could invest in stocks and shares or invest in
00:00:48a company, and you get a financial return on that investment.
00:00:52So we choose how much to invest in education by looking to
00:00:56maximize the you of the future streams of income that we get
00:00:59in our lifetime when we have that level of education,
00:01:03and we take away the cost of acquiring that education.
00:01:06Because acquiring education costs us.
00:01:10It costs us money if we have to pay tuition fees, and it costs us time.
00:01:12But it's also rewarded because people with more education tend
00:01:17to get paid a higher wage.
00:01:21So we're going to remain in school or college or university
00:01:24up until the point at which remaining in school any longer
00:01:27doesn't increase our lifetime earnings or what we think are
00:01:31gonna be our lifetime earnings enough to offset the time and
00:01:35the money it costs to acquire that education.
00:01:38So first of all, a question to think about,
00:01:42how adequate a picture think that gives of how people
00:01:45actually decide on their education?
00:01:48
Cite this Lecture
APA style
Dickson, M. (2023, September 07). Is University Worth It? - Human Capital [Video]. MASSOLIT. https://massolit.io/courses/is-university-worth-it/financing-higher-education
MLA style
Dickson, M. "Is University Worth It? – Human Capital." MASSOLIT, uploaded by MASSOLIT, 07 Sep 2023, https://massolit.io/courses/is-university-worth-it/financing-higher-education