Saturday, September 13, 2008

WHY HUMAN CAPITAL MATTERS

Professor Glaeser of Harvard University wrote an interesting article, addressing the issue of importance of human capital for economic growth, income and welfare (here):

"Also since the mid-1970s, America has become much more unequal. Not all inequality is bad. I wouldn't mind if the guys who gave us Google earned even more, given their contributions to society. I do, however, care deeply that millions of Americans seem to have reaped, at best, modest benefits from the past 30 years of technological change... By contrast, investing in human capital offers the potential for permanent increases in earnings that encourage work. Education increases the ability to deal with innovation, so that investing in skills today will make Americans better able to weather the storms of future technological changes."

4 comments:

denis bider said...

I am bothered by constant complaints about how middle class Americans - the most spoiled of large population groups on Earth - have not "benefitted" enough over the past 30 years.

The world's resources are finite, and as the global developed population grows every year - as Eastern Europeans and Asians ascend out of poverty - all of these people begin to consume more, and increase competition for everyone else who is consuming.

Without technological progress, a logical consequence of this would be falling standards of living for Americans and other already developed populations. That their standard of living has not fallen, but stayed roughly the same, is evidence that technological progress is benefitting Americans, and is countering the pressures of competition among consumers as more people worldwide are becoming prosperous.

Meanwhile, inequality in the US is increasing because the moneyed participate in the world economy, which is growing.

HUMBERT A MOROCCO said...

Are inhuman capitals teh zombies?

Grega Fajdiga said...

Is it just me or is there no link?

Rok Spruk said...

I forgot to attach the link to the article. Here:
http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/05/the_dream_for_a_human_capital_agenda/

Best regards,
Rok