Human Capital, and Intergenerational Mobility - The Basic Model (1of2)
By Gary Becker - University of Chicago
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446
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Lecture Description
"This the second lecture in the ""Lectures on Human Capital"" series by Gary Becker. This series of lectures recorded during the Spring of 2010 are from ECON 343 - Human Capital, a class taught every year by Gary Becker at the University of Chicago. In this class, Becker expounds upon the theory of Human Capital that he helped create and for which he won the Nobel Prize. Please see attached lecture notes, video annotations, and reading list for more information.
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Professor Becker models the investment in the human capital that parents make on behalf of their children. He analytically develops a simple one-overlapping generation rational choice model in which the parents can only spend income on their own consumption goods or in the human capital investment of their children. He then derives the comparative statics predictions that are implied. These results set up a discussion about intergenerational income mobility and regression to the mean in this context. Finally, he begins to discuss capital markets and their imperfections.
Throughout the discussion, Becker assumes the following: a single kind of human capital investment, one-parent household (i.e. no marriage or unisex model), and a one-child household. The parameters in this model are the altruism and the income of the parents, and the parameter that converts the human capital of the kids into earnings. Common microeconomic theory assumptions about utility and production functions are settled.
Key concepts: altruism, capital markets, capital markets imperfections, consumption goods, intergenerational income mobility, investment in human capital, one-overlapping generation rational choice model."
Course Description
"This series of lectures recorded during the Spring of 2010 are from ECON 343 -- Human Capital, a class taught every year by Gary Becker at the University of Chicago. In this class, Becker expounds upon the theory of Human Capital that he helped create and for which he won the Nobel Prize.
In total, there are 19 lectures. Each lecture includes a short description of topics covered as well as topical keywords. The interested viewer is also provided with references to books and journal articles from Gary Becker's own original research that bear on the topics discussed in each lecture. Additionally, the viewer is also referred to the appropriate section of a freely available and informal set of student notes. These lecture notes are provided as-is and the author, Salvador Navarro Lozano cannot accept responsibility for any typos or errors. Much of the lecture material already appears in one of Gary Becker's academic books and those remain the best source of information in case of any doubts.
Over the years, thousands of graduate students in Economics, Sociology, Public Policy, and other fields have benefited from the teachings of Gary Becker in his Human Capital class. We hope that by providing these lecture videos and notes that people around the world can increase their own human capital and enjoy studying this fascinating subject of human capital as taught by Gary Becker.
Filmed by: Joey Brown
Lecture Summaries: Jorge L. Garcia
Lecture Notes: Salvador Navarro Lozano
Supported by: The Becker Center at the Booth School of Business at the University of Chicago"
