ABSTRACT
How to account for the wide and persistent differentials in per capita productivity in the world economy? From a Marshallian perspective, these differences are related to microeconomic factors (e.g. organization) and in particular to per capita investment in human beings as agents of production. Marshall believed that the relative importance of mental vis-à-vis manual labour tended to increase through time; and he held the view that human capital - i.e. the physical, moral and cognitive attributes of workers, professionals and business men - is one of the most important of all inputs in the production function and one of the key elements in the process of organic growth. The aim of this paper is to present Marshall’s theoretical and normative thinking on the economic role of education and to bring out his pioneering contribution to the modern theory of human capital.
KEYWORDS:
History of economic thought; Marshall; human capital; education