While at a conference today discussing the impact of Social Capital I was reminded of a paper I wrote last year about Human Capital Theory and its application to my journey as a professional.
What is Human Capital?
Human Capital (HC) is an economic term, which reveals the cost and benefits of the investment in a populations skills, and knowledge which raises productivity of workers and increases productivity and quality of work done (Van Loo 2004, Merwe, 2010, Boudarbat, 2010). This idea is simple in definition but the implementation of the investment is often difficult because there are many ways to increase skills and education and many points in an individual’s career which one can access education and training. Individuals, Governments, and Corporations invest heavily in HC, and like any investment there are risks and benefits to investing in HC. During the course of this paper I will be discussing the history of HC, current research in the area of HC, current HC trends in Canada, the effects that human HC has had on my life, criticisms of HC, and finally I will discuss the implications about the use of HC theory as a lens to understand the value of education for individuals and society.
The following is an account of my journey in education through the lens of Human Capital Theory
The effect of HC on my life
I attended all of my primary and secondary schooling in Northern Manitoba. I graduated from high school in the mid nineties, which research says is good for society and for my average lifetime wages. Tsai (2010) notes that the completing secondary schooling has the largest impact on HC for an individual and society. At the time I applied to work at the local mine a local mine and the University of Manitoba. The reason I applied to work at the local mine was entirely monetary, the average wage at the local mine at the time was $80 000, luckily for me I was not hired. Boudarbat, (2010) suggests that those who are educated will yield higher lifetime earnings, and reduced unemployment, which has been true for me. I chose to go to university because both of my parents are university educated and I was not hired at the local mine.
All skills and talents have value and a cost in acquiring them (Folloni, 2010). Living with two university graduates allowed me to learn skills that were part of my culture at home. My ability to access scholarly skill sets like having them edit my essays and teach me how to study were a great asset to me later in life. This informal education I received at home was a basis for much of my later activities as a student and lifelong learner. Each of these skills required that my parents took the time to teach me and in a way had a cost. My stepfather was a Psychologist in Thompson, which allowed me to access several jobs as a respite worker for the local health authority. Not only was I able to capitalize on my families informal training but also the heavily entrenched social and cultural capital that my parents were connected to as professionals in my community.
This early pseudo professional experience made me interested in pursuing a university education and to one day become a psychologist. The experience was another episode of informal training that has stayed with me as an adult, I often reflect on my experiences as a respite worker and continue to help those who are intellectually challenged in my school. My parents are all university educated and much of my extended family has been university educated. Bourdarbat (2010), educated parents have children with better outcomes in general which is true for me and has been true for all of my siblings.
I took my first year of my bachelor of arts (B.A.) by distance education in my community and managed to get on the local school divisions substitute teacher list. I really enjoyed teaching and was exposed to all levels of education, and the pay was fantastic for someone with my limited formal education. One of the reasons that I was hired as an unqualified substitute of only 18 years was that I had volunteered as a track coach at my high school. This experience was excellent and I managed to impress my previous gym teacher who then suggested to me that I put my name on the substitute list. I had not realized at the time but volunteering as a coach was a source of informal training which has greatly influenced my acquisition of HC. In hindsight this early opportunity to be a substitute teacher was one of many successes which led me ultimately to the field of education. My informal training as a teacher was also something that I placed on my resume, which helped me get my first job. Hansen (2007) indicates that informal training increases the likelihood that one will find and keep work, as well as reduce periods of unemployment and welfare. Thankfully I have always been employed and have never had to access the welfare system, although there were several occasions in university while I was quite poor but I persisted because I believed that my investment would pay off more than any job I was qualified for at the time.
I moved to Southern Manitoba to complete my B.A. and after four years in an undergraduate degree I had wanted to apply to the University’s Psychology department but found that the spots were limited and the criteria for admission far beyond my current grade point average. I had become part of the undergraduate psychology students association, which showed promise in getting me a leg up on my competition but ultimately my grades were simply not good enough. I decided to apply to the Education after degree program at the University of Manitoba. At this time I had accrued significant student debt and was working full time to avoid amassing any more. I have always viewed my education as an investment in myself which I believed would pay off in the future. The theory of HC supports the notion that if you educate yourself you should view this as an investment rather than a capital expense,(Gu 2010, Folloni, 2010, Boudarbat, 2010, Becker 1964). My job at the time was as a call centre manager where I made $12.55 an hour, which at the time was significantly more than the $6.00 per hour minimum wage. My early informal training as a coach and older brother of six other children in my family made me a natural leader. All of my parents and stepparents have leadership roles and manage large groups of people. Interestingly they are also all civil servants in one way or another as well.
After completing my Education degree I successfully found employment in a northern community as a middle years teacher and signed a contract which entitled me to the starting wage of $40 000 a year. Although my pay was only $10 000 a year more than I was making at the call centre, this new career would allow me to make far more income within the next ten years from my starting point and had far better job security. In my first teaching position in a northern community I was allowed to be acting principal in my first year as a teacher. My earlier experiences as a Manager at a call centre afforded me many skills, which were transferable to my position as acting principal. Becker (1964) notes that in terms of evidence for the value of human capital “…the most impressive piece of evidence is that more highly educated and skilled persons almost always tend to earn more than others” (p.2). As acting principal I was leading those that were many years my senior, had more teaching experience and had lived in the community far longer. The skills that I had which were noticed and most valuable were my interpersonal skills. Another skill which I had learned in the call centre industry was the ability to deescalate angry customers and to help them solve their problems. This is a skill that I use every day with my staff, students and parents whom I serve. Becker (1964) predicts that acquiring skills and training at any age will inevitably result in higher earnings for the learner. He also notes that the earlier you acquire the skills the more earning potential you have over your lifetime. It is also important to note that although I enjoyed my job at the call centre I often felt board and didn’t find the job challenging enough. I was not aware of how important the informal training that I was receiving at the call centre was.
Eventually I got my first teaching job and I began taking courses towards my Post Baccalaureate in Education (P.B.D.E) which would potentially help me be a better teacher and would certainly increase my wages. There is a HC reward system in place for teachers who complete levels of formal education, which takes the guesswork out of the value of attaining HC. Teachers receive more pay for each degree they complete in Manitoba, so the investment was an easy one to justify. At the beginning of my P.B.D.E the only motivation was the increase in pay which upon reflection makes sense because I had not learned enough yet to yield the benefits of my future scholarly thought. Becker (1964) notes that one must measure the cost benefit or education and training and that if time must be taken off of work you need to consider the opportunity cost of lost wages and time on the job. I didn’t have to miss any work as I was taking distance education courses and studied on weekends and evenings, which lowered the opportunity cost for me. There were other costs in my personal leisure time and ability to volunteer as a coach at school but they were relatively minor and only temporary. Once I completed my P.B.D.E I found that much of what I had learned made me a more reflective practitioner with a larger breadth of knowledge to draw from. Another fringe benefit to completing my P.B.D.E was that I was more marketable and it also allowed me to become an administrator in my sixth year as a teacher. The combination of my many informal management experiences, good parental role models, as well as my formal education in my P.B.D.E were all evidence of my future success according to Becker (1964).
Accessing education became a passion for me I was taking courses towards my P.B.D.E and accrediting myself as a licensed level one and two Principal helped me advance in my career at an accelerated pace. I recently completed a Masters degree in Educational Administration, which has had the same benefits that the P.B.D.E did.
The development of my own HC has given me unique job opportunities in a field that I thoroughly enjoy. I have been able to do things that many people my age have not been able to. Accessing my B.A., B.ed, P.B.D.E and a Master’s Degree has allowed me to take on jobs and positions that otherwise would not have been possible. My wife is also university educated and as a couple we enjoy a very comfortable lifestyle, which has afforded us the opportunity to travel, buy a cottage, build a home and start a family. I feel that we live a privileged lifestyle which is highly related to our collective accumulation of HC. Besides the immediate comforts, as a result of our education, research by Boudardbat (2010) indicates that our children are more likely to go to university and also achieve gains from our successes. In my case the investment in HC has been overwhelmingly positive. Looking at my life through the lens of HC has shown me the benefit of my education however there are many criticisms of human capital theory.
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