Human capital: A critique

The human capital approach increasingly has been absorbed within the folds of cultural determinism. The trend has been so pronounced that it prompted the organization of a session at the December 1984 American Economic Association meetings in Dallas, Texas, entitled “Human Capital and Culture: Analyses of Variations in Labor Market Performance.” The papers from that session are available in the May 1985 issue of theAmerican Economic Review. One of the discussants for the session was Stephen Steinberg, a sociologist at Queens College. Steinberg was invited to comment on the presented papers for two major reasons—first, he had written an outstanding study that debunked many of the conventional linkages made between culture and ethnic achievement,The Ethnic Myth, and second, as a sociologist, he was expected to provide a perspective on the subject quite different from the rest of the panelists, all of whom were economists. In the midst of the coven of economists, Steinberg appeared well armed. He arrived with his own paper, a paper that went far beyond comments on the presented papers. Unfortunately, the current rules governing the inclusion of papers in the AEA proceedings prohibit publication of the discussants’ remarks. Fortunately, Steinberg graciously has consented to have the paper appear in theReview of Black Political Economy.     

The price of human capital in a pre-industrial economy: Premiums and apprenticeship contracts in 18th century England

Training through apprenticeship provided the main mechanism for occupational human capital formation in pre-industrial England. This paper demonstrates how training premiums (fees) complemented the formal legal framework surrounding apprenticeship to secure training contracts. Premiums varied in response to scarcity rents, the expected productivity of masters and apprentices, and served as compensation for the anticipated risk of default. In most trades premiums were small enough to allow access to apprenticeship training for youths from modest families.     

Saving,investment, and capital mobility: A comment on Leachman

In this note we use a consistent long-run data set recently published by Maddison (1991) for 10 countries to examine the long-run relationship between saving and investment. In contrast to recent findings of Leachman (1991) we conclude that saving and investment are cointegrated in many countries. Our results suggest that aggregate demand and supply shocks explain much of the time series correlation between total saving and investment.     

Sectoral shift in antebellum Massachusetts: A reconsideration

But no man, who can have a piece of land of his own, sufficient by his labor to subsist his family in plenty, is poor enough to be a manufacturer, and work for a master. Hence, when there is land enough in America for our people, there can never be manufacturers to any amount of value. Benjamin Franklin, 1760¹