Human Capital Theory

Traditional approaches to labor economics posit workers as a homogeneous entity, which can make it difficult for scholars to identify and learn from the complexities of a nation's workforce. In this book, economist Jeremiah M. Allen provides new ways to make sense of the concept of human capital. This approach helps readers make sense of skillset diversity, worker preferences, worker ability, and more, in context.

The book begins with foundational concepts in economics.  Later chapters explore worker heterogeneity in labor markets, long-run equilibrium, and economic decisions based on worker preference and ability. Integrating prospect theory and expected utility, the book connects these concepts back to microeconomic principles and fundamentals.

By examining real-world scenarios and economic phenomena, the book equips students, researchers, and scholars with the tools needed to analyze and conceptualize human capital today. Readers will step away from the book with enhanced knowledge about labor economics in the context of economics education and policy.