Investing in Human Capital (Essay Sample)

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Investing in Human Capital
Unlike most approaches to income distribution, which comprises mainly of the mechanical curve fitting and probability mechanism, the paper by Gary and Berker focuses on maximizing behavior as its basic assumption of the general economic theory. In their argument, the authors state that every individual is presumed to maximize his or her economic welfare only through investing the suitable amount in human capital, and the distribution of earners is influenced by the distribution of their investments and return on investments. Investing in human capital as a way of maximizing social welfare is presented with some and benefits for agents in the proposed model championed by Gary and Barry. Grossman states that there are legal and several other obstacles that impede maximizing the well-being of individuals or participants who invest in human capital, especially in countries like the United States of America (Grossman 42-110). Investment in human capital is beneficial to economic growth since it increases the knowledge and skills of people and ultimately leading to increased wealth accumulation (Vasylieva et al., 426-436).