Teaching Human Capital – Econlib

How do I get students to think about the topic of human capital?

I ask them: what is the most valuable resource in the world?

Oil, water, air?

“People” is usually a tentative answer, indicating uncertainty about the meaning of a resource.

Once it has been determined that a resource exists anything that produces goods and servicespeople or human capital is reasonably understood.

I ask for examples. This is always interesting. High school students are deeply involved in the manufactured application frenzy, convinced that “declaring a major” builds confidence about their future academic plans. Beyond categories such as technology, computer science, international relations. or psychology, students are rarely exposed to the sheer magnitude of performed tasks – jobs – that exist even within their intended future field of study.

Then I describe a few. A deep-sea welder is a diving expert who may spend only two hours on a workday hundreds of meters under the sea welding pipes and equipment. A radiation oncologist spends much of her time with patients, building relationships during treatment(s), working closely with surgeons and a variety of other medical specialists as she studies scans, blood tests and other data. An iceberg mover is an expert in maritime navigation. He works closely with oil companies and environmental agencies and uses technology to monitor and even tow icebergs by ship or tug to safeguard offshore infrastructure. A pet food tester uses their senses to work closely with nutritionists and product developers to ensure recipes’ quality, taste, texture, consistency, spoilage and overall palatability. I’m having fun with this ever-changing part of my presentation, showing images of employees in their unusual environments.

The reality is that most of us will spend more than 100,000 hours in our lifetime trading our valuable human capital for income in what will likely be a non-linear sequence of jobs within and between fields, where only some of us have expertise. can acquire in a particular area. work area. (A great opportunity to relate the concept of scarcity to the value of field expertise as this concept is introduced in the first week of class). By thinking about human capital at a personal level, students can relate the concept to the macro level of a country’s factors of production.

The factors of production, which are always presented as land, labor and capital, and to which entrepreneurship has been added in recent decades, provide a basis for understanding economies. People (not governments) make decisions to combine these factors of production into goods and services based on changing individual and collective needs and wants. It is the scarce resource of labor, in a world population of 8.25 billion people, that provides the physical and intellectual work that produces goods and services.

Here I like to look back at the profound wonder of living in a free and responsible society where our tastes and preferences differ. Our ability to choose from so many options is as important in our work as it is in our everyday ability to choose the products that meet our needs and wants. In addition, and relevant to our personal choices, is our ability to elect representatives to follow the direction of our community and our country and make decisions about the use of scarce resources. I remind students that this phase of life, which for most (at the elite high school where I teach) includes college and a first job, is temporary. Some will get a degree and some will leave before getting one to start their first ‘real’ job. They will face many professional and personal decisions in their lives that will affect the trajectory of their careers.

A follow-up assignment is to give the students a short tour of the building BLS website. I then encourage students to explore the area Labor Outlook Handbook and to collect information on at least three job titles, including the level of education required, average salaries and expected growth rate. I also have them list five or six specific job titles within a larger category of career interests, including some that they have never heard of or imagined. The site contains a wealth of regularly updated information that is more interesting to young people than they could imagine before that day’s lesson.

A related, but very different production factor requires a separate teaching day. Entrepreneurship. I will share that soon.

Alice Temnick is an IB Economics instructor for the United Nations International School in New York City.