Accumulation du capital humain - synthèse

Using peer-reviewed material of your choice, critically discuss the importance of education and life-long human capital accumulation in the job market, linking your analysis specifically to labour market entry and to workplace earnings.

Education and life-long human capital accumulation generate considerable returns on both professional and private life. As far as labour market is concerned, skills and experience learned during education may not only affect earnings but also the likelihood of being unemployed. Economists’ thoughts and ideas have been highly inspired by Gary Becker’s view on long term decision making, human capital investment and returns because considering education as a financial investment appears to be substantially effective in analysing the job market’ behaviours. In low-income countries, education often increases the prosperity of disfavoured people by increasing their productivity, allowing them to learn new competences all over their professional career and moderating the risk of unemployment. The importance of life-long learning capital accumulation and its returns is also being more and more discussed as the OECD has been focusing its policies on lifelong learning as it is considered to becoming a key factor of economic growth and competitiveness (OECD, 2003). The importance of lifelong human capital accumulation on economic growth comes from the fact that huge technological changes have occurred every year since few decades. Therefore individuals always have to keep their skills updated to in order to maintain their chance of being employed and earning decent wages. The following essay first gives a brief analyse of the definitions and theories around education and lifelong human capital accumulation. It then critically discusses the importance of education and lifelong learning in terms of labour market entry. The last part of the essay tackles the issue of the conducive effect of education and lifelong learning on earnings from different points of view. The conclusion of this essay will focus on the other returns that education can bring and their general increase since the 1980s.

In this essay, we consider education as the whole process of human capital gathering which happens before entering the job market. According to Becker (1964), Schultz (1960; 1961) and Mincer (1958) high time and financial investments in education raise individual’s productivity and therefore increase their earnings. This approach, which takes education as a human capital investment and earnings as one of the returns, will be dealt with later on in this essay. Human capital is a combination of skills, abilities, talents, qualifications and experiences accumulated by an individual that determines its capacity to work. Most human capital theories such as Becker’s overlook another important model that considers education as a “screening” solution for individuals as well as a solution to identify those who are able to signal aptitudes to employers (Spence, 1973). The screening theory excludes the role of education on individual’s productivity and points out that in the presence of disproportionate information about employee’s productivity, education background offers signals to employers and offers and gives them a “screening” tool in order to identify highly skilled potential employees. Even if those two theories diverge on the productive return of education, it has to be highlighted that both them argue that education decrease the chances of being unemployed.

From the labour market perspective, the lifelong human capital accumulation or lifelong learning is defined here as every form of knowledge accumulation acquired that arise at the end of an individual’s education that is to say when the individual enter the job market. According to Fischer (2000), “lifelong learning is more than training or continuing education; it is a mind-set and a habit for people to acquire”. He argues that lifelong learning is essential as the demand for highly technical jobs is rising, the change of job in professional career is almost inevitable and the expanding gap between the opportunities offered to the educated and to the uneducated (Fischer, 2000). In other terms, todays jobs have become so flexible and knowledge-intensive that learning throughout his life must turn to be an important part of adult professional activities. In this approach learning can be considered as “new form of labour” (Zuboff, 1988: 395).

In more recent years, lifelong human capital accumulation has been considered by governments as an opportunity for people to find a second chance and improve their mobility as far as employment is concerned. That is one of the reasons why, in many developed countries school learning and job learning (through internships for example) are being incorporated during education. Nowadays almost every developed country refers to lifelong learning in their education policies and the idea is widely advised by the OECD and European Commission.

As an example for this current trend in policies, in the UK the overall expenditure on adult learning provision totals about £55 billion every year which accounts for approximately 3.9 per cent of the British GDP. From this amount nearly £26 billion is spent from the state’s purse, £20 billion on training by private and nonprofitmaking organizations and £9 billion by individuals (Schuller & Watson, 2009). The detailed expenditures of the country in 2007-2008 are explained by the graph on Appendix 1. Schuller and Watson’s figures on adult learning are showing the opposite of the current situation of education in the UK where students have to bear almost all the costs of their education. The high expenditures of state and private organizations points out the government focus on lifelong learning policies and investments.

However the question is do these investments in lifelong capital accumulation and education have an impact on labor market entry?

Education plays an important role with regard to labour market entry and it is the best mean to increase their jobs opportunities although it does not guarantee employment. According to the OECD, “people with higher levels of education have better job prospects; the difference is particularly marked between those who have attained secondary education and those who have not”. There is no coincidence why parents throughout the globe favour education for their children as their main priority. Most of them believe a high education will increase their children’ chances to get a job, an idea that can be proven by many facts. Generally among OECD countries, 83% of the individuals who own a tertiary education degree are employed while 74% for

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