Human Capital.

Human Capital is Becker's classic study of how investment in an individual's education and training is similar to business investments in equipment. His most famous book, which is no small claim given the scale and diversity of his many contributions to economic science. In Human Capital he developed 'a general theory of human capital formation via schooling and labor training which served as the starting point for what has been aptly described as the "human investment revolution in economic thought", which swept over economics in 1960s' (Blaug). "Although he was in uncertain territory in the early 1960s, the rational choice approach to human capital Becker pioneered has bequeathed what is today a 'uniform and generally applicable analytical framework' (Nobel Foundation, 2004). Becker's starting point is to interpret the decisions by individuals to invest in their own capabilities through education, training, medical care and so on as turning on the balance of benefits and costs of such investments. This is not simply a narrow appeal to self-interest as individuals maximize welfare subjectively and they may be as much motivated by altruism as greed. The benefits of investing certainly include higher earnings and better jobs but they also encompass, for example, cultural enrichment where individuals think this is important. The costs center on the value of the time surrendered in making investments" (Vane & Mulhearn, The Nobel Memorial Laureates in Economics, p. 204). "Gary Becker is one of the most original minds in modern economics and his writing shave the unique quality of opening up new horizons in economic analysis by relating widely observed but apparently unconnected phenomena to the operation of some single, general principle' (Blaug). He was awarded the 1992 Nobel Prize in Economics for 'having extended the domain of microeconomic analysis to a wide range of human behavior and interaction, including nonmarket behavior."