Human Capital Vol. 1, N. 1: First issue of a new journal

University of Chicago Journals has recently published the first issue of the new journal - Human Capital . This journal is based on a series of theoretical developments in economics beginning about 40 years ago leading to what today is called human capital theory. While it dates back to some classic theorists it is probably most closely associated with economists Gary Becker and Theodore Schultz. Students of human evolution should be familiar with the concept from its role in embodied capital theory, which has been used by Hilly Kaplan and colleagues to explain the coevolution of intelligence, long lifespan, dependent offspring, and complex foraging niche that has characterized primate diversification in general and especially the evolution of the human life course and adaptive niche (a pdf of one of the papers on this can be found here).

All of the articles in this inaugural issue look really interesting and blog worthy, so I'm just going to post titles and abstracts so that they are on your radar. It looks like it should be a really interesting journal to watch and I look forward to taking in some of these papers during vacation.
The first paper is by Isaac Ehrlich and Kevin M. Murphy and explains why a seperate journal of human capital is necessary. It gives a nice explanation for the rationale of human capital theory and its historical development.

The rest of the papers in the journal are as follows:

Education and Consumption: The Effects of Education in the Household Compared to the Marketplace

Gary S. Becker and

Kevin M. Murphy

University of Chicago and Hoover Institution

This article considers various differences between the effects of education in the marketplace and households. It shows that the household sector rewards skills that are useful at the many tasks that household members must execute, whereas the marketplace rewards skill at specialized tasks. In addition, increased supplies of more educated persons reduce returns to education in the marketplace, whereas if anything, increased supplies raise household returns to education. The greater demand over 40 years for household and market skills may have raised returns to education in households compared to those in the market sector.

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The Changing Role of Family Income and Ability in Determining Educational Achievement

Philippe Belley

University of Western Ontario

Lance Lochner

University of Western Ontario and National Bureau of Economic Research


We use the National Longitudinal Survey of Youth 1979 and 1997 cohorts to estimate the effects of ability and family income on educational attainment in the early 1980s and early 2000s. The effects of family income on college attendance increase substantially over this period. Cognitive ability strongly affects schooling outcomes in both periods. We develop an educational choice model that incorporates both borrowing constraints and a “consumption value” of schooling. The model cannot explain the rising effects of family income on college attendance in response to rising costs and returns to college without appealing to borrowing constraints.

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The Production of Cognitive Achievement in Children: Home, School, and Racial Test Score Gaps

Petra E. Todd and

Kenneth I. Wolpin

University of Pennsylvania


This paper studies the determinants of children’s scores on tests of cognitive achievement in math and reading. Using rich longitudinal data on test scores, home environments, and schools, we implement alternative specifications for the cognitive achievement production function that allow achievement to depend on the entire history of lagged home and school inputs as well as on parents’ ability and unobserved endowments. We use cross‐validation methods to select among competing specifications and find support for a variant of a value‐added model of the production function augmented to include information on lagged inputs. Using this specification, we study the sources of test score gaps between black, white, and Hispanic children. The estimated model captures key patterns in the data, such as the widening of minority‐white test score gaps with age and differences in the gap pattern between Hispanics and blacks. We find that differences in mother’s “ability,” as measured by AFQT, account for about half of the test score gap. Home inputs also account for a significant proportion. Equalizing home inputs at the average levels of white children would close the black‐white and the Hispanic‐white test score gaps in math and reading by about 10–20 percent.

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The Evolution of Income and Fertility Inequalities over the Course of Economic Development: A Human Capital Perspective

Isaac Ehrlich

State University of New York at Buffalo and National Bureau of Economic Research

Jinyoung Kim

Korea University

Using an endogenous‐growth, overlapping‐generations framework in which human capital is the engine of growth, we trace the dynamic evolution of income and fertility distributions and their interdependencies over three endogenous phases of economic development. In our model, heterogeneous families determine fertility and children’s human capital, and generations are linked via parental altruism and social interactions. We derive and test discriminating propositions concerning the dynamic behavior of inequalities in fertility, educational attainments, and three endogenous income inequality measures—family‐income inequality, income‐group inequality, and the Gini coefficient. In this context, we also reexamine the “Kuznets hypothesis” concerning the relation between income growth and inequality.

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Enjoy!

best wishes,

Oskar