College and Human Capital

Hallie Tomlinson – Honorbound – Period 2

In Chapter 6 of Naked Economics, Charles Wheelan describes human capital as “the sum total of skills embodied within an individual: education, intelligence, charisma, creativity, work experience, entrepreneurial vigor, even the ability to throw a baseball fast.”[1]  He states that “[i]t is what you would be left with if someone stripped away all of your assets—your job, your money, your home, your possessions—and left you on a street corner with only the clothes on your back.”[2]  In these quotes, Wheelan highlights the strong connection between an individual’s education and their human capital and productivity.  With the search for the right college in the spotlight of my life right now, many questions arise in my mind when reading about higher education and human capital.  The main question that comes to mind is: does going to college and investing in higher education increase one’s human capital and productivity?

Timothy Schiller explores this question in his article titled “Human Capital and Higher Education: How Does Our Region Fare?”  In his article, Schiller’s main point is that education is an investment in human capital.  Schiller describes that investing in higher education will ultimately increase one’s human capital and productivity, “produc[ing] a return to the individual in the form of higher earnings.”[3]  Schiller uses statistics from 2006 from the U.S. Bureau of Labor to emphasize this point.  The statistics compare one’s education to the unemployment rate percent and one’s median weekly earnings dollars.  In 2006, the unemployment rate for individuals who graduated from high school but did not go to college was 4.3%, and the median weekly earnings dollars was $595.[4]  The unemployment rate for individuals who received a bachelor’s degree was 2.3%, and the median weekly earnings dollars was $962.[5]  This data from 2006 compares to current data.  In November of 2016, the unemployment rate for individuals (25 years and older) who graduated from high school but did not go to college was 4.9% and 2.3% for individuals with a bachelor’s degree or higher.[6]  This data from 2006 and from November 2016 implies that individuals who invest in higher education have a higher human capital and productivity level, which ultimately leads to them getting a job and earning higher wages in the economy after college.  The fact that the unemployment rate for individuals who receive a bachelor’s degree is lower than the unemployment rate for individuals who do not go to college suggests that investing in higher education reaps many rewards like increasing one’s human capital, increasing one’s productivity level, and enriching one’s mind, contributing to economic success in life after college.

After reading about Timothy Schiller’s and Charles Wheelan’s views on higher education and human capital, I now look forward to the growth of my human capital, productivity level, and knowledge while in college and having economic success because of this later in life.

[1] Charles Wheelan, Naked Economics: Undressing the Dismal Science (New York: W. W. Norton & Company, 2010), 127.

[2] Charles Wheelan, Naked Economics: Undressing the Dismal Science (New York: W. W. Norton & Company, 2010), 127.

[3] Timothy Schiller, “Human Capital and Higher Education: How Does Our Region Fare?” Federal Reserve of Philadelphia, accessed December 3, 2016, file:///C:/Users/Student/Downloads/schiller_human-capital-and-higher-education%20(5).pdf.

[4] Timothy Schiller, “Human Capital and Higher Education: How Does Our Region Fare?” Federal Reserve of Philadelphia, accessed December 3, 2016, file:///C:/Users/Student/Downloads/schiller_human-capital-and-higher-education%20(5).pdf.

[5] Timothy Schiller, “Human Capital and Higher Education: How Does Our Region Fare?” Federal Reserve of Philadelphia, accessed December 3, 2016, file:///C:/Users/Student/Downloads/schiller_human-capital-and-higher-education%20(5).pdf.

[6] “The Employment Situation – November 2016,” United States Department of Labor: Bureau of Labor Statistics, accessed on December 3, 2016, http://www.bls.gov/news.release/empsit.htm.

Photograph – “How Investors Are Turning Cash-Strapped College Students into Human Capital,” Alternet, accessed on December 3, 2016, http://www.alternet.org/education/new-loans-let-rich-invest-college-students.

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