Agustin, Eric Datu. (2007). A Summary Paper about Schultz's, Thurow's, Bluestone's, Paci's, Coleman's,
Brown's & Demerath's Educational Sociological Thoughts. Manila, Philippines: Eilvu Gimatria Research
A SUMMARY PAPER ABOUT SCHULTZ'S, THUROW'S, BLUESTONE'S,
PACI'S, COLEMAN'S, BROWN'S & DEMERATH'S EDUCATIONAL
By Prof. Eric Datu Agustin1 a.k.a. Eilvu Gimatria
Tag: Summary Paper, Schultz, Thurow, Bluestone, Paci, Coleman, Brown, & Demerath, Educational Sociological
Thoughts, Sociology of Education
Eric D. Agustin is an Associate Professor of Education at the University of the East, Manila, Philippines. He is presently a Ph.D.
Education candidate at the University of the Philippines, Quezon City. He holds a MAEd in Administration and Supervision from the
Tarlac State University. He is a PRC licensed secondary school science teacher. He has been a Licensure Exam for Teachers (LET)
coordinator and reviewer, researcher, Physics teacher, science coach, computer instructor, and chess coach. His research interests are in
the fields of educational philosophy, educational management, and research and evaluation. (Email: email@example.com or
1. THEODORE W. SCHULTZ PUBLISHES INVESTMENT IN HUMAN CAPITAL (1961)
Schultz introduces his theory of Human Capital.
Both knowledge and skill are a form of capital, and that this capital is a product of "deliberate
He highlights Western countries, and explains their increase in national output as a result of investment
in human capital. He also makes a direct link between an increase in investment in human capital, and
the overall increase in workers earnings.
'Shying Away from Investment in Man'. It argues that economists have been afraid to relate to
human beings as capital. Schultz believes that the concept of human capital has negative connotations
that arise from the American experience of slavery, and that society is hypersensitive towards anything
that serves as a reminder of that system. For Schultz, however, the concept of human capital implies
an investment in people. He argues that education, training, and investments in health open up
opportunities and choices that otherwise would be unavailable to many individuals. Schultz compares
the acquisition of knowledge and skills to acquiring the "means of production." Workers no longer
have to be at the mercy of others; instead they can be in control of increasing their own productivity
Economic Growth from Human Capital. Schultz argues that the difference in earnings between
people relates to the differences in access to education and health. For example, when farm folk move
to the city, or when African-American kids look to find work, they experience a barrier that arises from
their lack of human capital (i.e., appropriate knowledge and skill). Schultz also argues that in many
underdeveloped countries, food and shelter are of primary concern, and thus there are short-term
investments made to deal with these crises. In societies whose main concern is not basic needs, there is
the opportunity for long-term investment in education, health, and migration (i.e., helping people adjust
by finding them jobs and offering them the opportunity to learn/improve their skills). In the long-term
these investments will strengthen the economy and raise the standard of living.
'Scope and Substance of These Investments'. Schultz argues that investment in human capital must
focus on supporting individuals in acquiring an education, since it is skill and knowledge that affect
one's ability to do productive work. He believes that an investment to enhance these capabilities
leads to an increase in human productivity, which in turn leads to a positive rate of return. Schultz
criticizes those who see investment in human capital as a cost. He argues that while in the short-term
there may be a cost (i.e., cost of facility, loss of earnings for workers while in school, etc), in the long-
term the yield from the investment will far outweigh the cost.
Finally, the fourth section
'A Concluding Note on Policy'. Here, Schultz discusses social implications and policy of his theory.
This can be summarized in nine main points:
1. Existing tax laws (i.e., in 1961) discriminate against the investment in human capital.
2. Unemployment (i.e., sitting idly) causes human capital to deteriorate.
3. There are hindrances to free choices of professions.
4. There is a need to provide funds for investment in human capital, and thus, long-term public and
private loans should be made available to students.
5. There should be investments made in migration (i.e., in helping people settle and find education).
6. There has been a failure to adequately invest in those who sit on the periphery of society (i.e.,
African-Americans, Puerto-Ricans, Mexican Nationals, etc.).
7. There has been an under-investment in human beings in general (beyond just those on the
8. The return on public investment in human capital should not be returned directly to each individual.
The individual will see a return in the form of wages, and will benefit from a strong economy.
9. As a society, we must assist underdeveloped countries to achieve economic growth, and to begin
investing in human capital.
Since this article first appeared, there has been much praise (in 1979 Schultz received the Nobel Prize
in Economic Sciences) and much criticism for human capital theory. Today, many still believe that
society needs to invest in people for the sake of a stronger, more productive economy, and also to
increase the opportunities and choices open to the individual. At the same time, however, many
criticize the Human Capital Theory as serving the needs of those in power (i.e., government and
business), and not the individual.
Paul Bouchard, in his article entitled "Training and Work; Myths about Human Capital" challenges
seven basic assumptions contained in Schultz' theory. Briefly, they are as follows:
Assumption 1: Human Capital is in investment in the future.
-It is impossible to accurately predict future labour market needs. All the forecasting tools we have are
Assumption 2: More training leads to better work skills.
-Organizations value particular skills and what these are often change over time. There are not
necessarily 'better' skills, just ones that fit what serve the needs of the organization at the time.
Assumption 3: Educational institutions play a central role in the development of human capital.
-Today our traditional educational institutions are not as relevant or effective as they could be. Things
change so fast that people tend to learn more on the job.
Assumption 4: Employees need to improve their skills.
-Work has not become more complex, in fact, with technology things have become 'easier'. The need to
improve one's skills comes from having to compete in a job market with people who are in many cases
Assumption 5: Training enhances employability.
-Many individuals do not have access to training and thus access to jobs, while others may have access
to training, but not to mobility wit