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This the eleventh lecture in the "Lectures on Human Capital" series by Gary Becker. This is part 1 of a two-part lecture; see Lecture 12 for part 2 of this lecture. 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.
Professor Becker explains the limitations of the previous model that tries to explain the decision of going to college. Then, he models the decision of education investment in a more general way with a utility maximizing rational choice model.
He offers a two period uncertainty model in which agents invest in their human capital in the first period. He explains how this model can be generalized to N periods. He explains how the human capital that the agent has affects the probability of surviving to the next period.
Based on this model, he reinforces the idea of the complementary property between different forms of human capital. Professor Becker also shows how the incentives to invest in education are affected by the probability of surviving to later periods in life. These lectures show how more educated people also have better non-monetary outcomes.
Finally, Professor Becker explains why education improves marital prospects and why education improves family earnings. He introduces the gains from marriage to this model.
Key concepts: family earnings, full income, leisure, life expectancy, marital prospects, probability of surviving.
• Lecture 11, (06:00-09:15): Professor Becker discusses one of his favorite pieces of data on life expectancy and education. He explains how this data evidences that educated people live longer in Russia and Estonia. Also, he claims that this data reveals that educated people fare better through chaotic times.
• Lecture 11, (10:40-11:55): Professor Becker talks about a debate that he had with Richard Posner about drunk drivers.
• Lecture 11, (13:10-15:05): Professor Becker explains why the returns to college look similar for men and women if the data is correctly interpreted.
• Lecture 11, (43:40-45:00): Professor Becker explains why college students take a lot of leisure.
• Lecture 11, (01:10:40-01:13:45): Professor Becker explains why utility levels appear in the first order condition when discussing value of life problems.
• Lecture 12, (14:15-19:35): Professor Becker discusses the health effects on education and vice versa. He gives some evidences about the differences of these effects across women and men.
• Lecture 12, (42:30-45:50): Professor Becker explains the economic returns from studying the liberal arts.
• "Education improves you marital prospects ... and more educated people tend to marry other more educated people."
• "If you look at anything... educated people are better at it... anything that's considered good.... adaptation to the iPad, is something new (...) I got one (...) I think it's a great piece of equipment."
• "Education helps you to adapt better to new environments."
• Chapter 4: Assortative Mating in Marriage Markets in Becker Gary. A Treatise on the Family. Enlarged ed. pp. 108-134.
• Chapter V: Rates of Return form College Education in Becker, Gary. 1974. Human Capital. Third ed. pp. 161-204.