Human Capital and its Critics : Gary Becker, Institutionalism, and Anti-Neoliberalism

Gary Becker's contribution to labor economics can be highlighted by contrast to his predecessors and critics. Human capital analysis was not much developed before Becker, although the concept was recognized by such prominent figures as Adam Smith, Alfred Marshall, and John Bates Clark. Rational-choice microeconomics, including human capital analysis, displaced the previously dominant Institutionalist approach to labor. Becker further applied human capital insights in his theories of crime, household production and the family, and personal preference development. Illuminating objections to an emphasis on human capital have come from mainstream economists in the 1960s (who offered the signaling theory of education), non-mainstream economists in the 1970s (who offered theories of labor-market segmentation), and current critics of neoliberalism