THE PAKISTAN DEVELOPMENT REVIEW
Issues in the Theory of Human Capital : Education as Investment
After a few references to the early literature on human capital, from Petty via Smith, Engel, and Nicholson to Marshall, various issues in current theory of human capital are briefly reviewed. They include questions regarding categories of ” tangible human capital” and “intangible nonhuman capital;” investment in raising children. in schooling, and in research and development; depreciation of human capital through obsolescence, loss of strength, illness, retirement, and death; conflicts between efficiency and equality in the educational system; wrong educational mix resulting in waste or even net loss; the problem of complementarity among different kinds of physical and human capital; and the complexity of econometric rese3rch on comparative returns to different investments.