Enhancing Human Capital Through Capability Education

Hardson Pindu Kwandayi
Doctoral candidate (Higher Education)
College of Education, University of Arizona, Tucson, USA.
E-mail: kwandayi@email.arizona.edu

Introduction

Investment in education or human capital is the sine qua non for the development of any nation. Its importance is reflected in the growing recognition, since the early 1960s, that investing in both formal and informal education provides and enhances people's skills, knowledge, attitudes, and motivation necessary for economic and social development (Psacharopoulos & Woodhall, 1985). At the individual level, investment in education yields both monetary and non-monetary benefits. With respect to monetary terms, the human capital theory contends that higher education is accompanied by higher income. However, this has not been consistent with research findings (e.g., Barringer, Takeuchi & Xenos, 1990).

My argument in this paper is that human capital or education per se does not always translate into high productivity and income. I argue that higher education must be retooled and rejuvenated with relevant technical and professional skills required by employers. In this regard, each institution should infuse its curriculum with capability education, which encompasses technical, conceptual and human relations skills. Such responsive curriculum will help to bridge the discrepancy between university education and workplace expectations. This will also reduce the gap between one's human capital and income. In the next section, I delineate important features of the human capital theory, which provides the conceptual framework for the paper.

Cardinal Facets of the Human Capital Theory

Human Capital Theory is based on the premise that individuals and society derive economic benefits from investments in people. Although types of human capital investment generally include health and nutrition (Schultz, 1981), education consistently emerges as the prime human capital investment (Sweetland, 1996). One main reason for this is that education is perceived as the cornerstone of all the other benefits through the process of cumulative advantage. Put simply, the theory of cumulative advantage suggests that advantages beget advantages and thus create a virtuous cycle. Also known as the Matthew effect (Berton, 1973), the perspective identifies resources (e.g. education in form of a degree) and recognition as means that facilitate an individual's upward mobility. As such, resources and recognition act as feedback loops that contribute to subsequent upward mobility. Overall, the cumulative advantage perspective captures the process of how success breeds success. With respect to human capital, it means that the more educated one is, the more the advantages one may accrue--other things remain equal. The second and more empirically important reason is that education can be measured in quantitative dollar costs and returns. (Johnes, 1993). Quantitative costs and returns to education can be assessed using the rate of return approach, which involves computing all the costs and benefits associated with educating an individual. Educational costs also include opportunity costs, that is, what one loses by going to school or college

The literature on human capital theory distinguishes among several types and means of education. There is formalized education at primary, secondary, and higher levels, informal education at home and at work, on-the-job training and apprenticeships, and specialized vocational education at secondary and higher levels (Sweetland, 1996). All these types and forms of education yield several benefits. Schultz (1981) identifies several categories of educational benefits and these include: benefits to the economy from educational research; cultivation and discovery of potential talent; increased capability of people to adjust to changes in job opportunities; preparation of teachers; and provision of human resources for sustained economic development. In addition, schooling provides for better citizenship and a chance to give the next generation better education, and therefore, better future. Better citizenship involves participating in the affairs of one's community as well as being aware of the benefits, privileges and responsibilities of community life. Overall, education helps individuals to develop better decision-making skills, values, and attitudes.

On an individual basis, education bestows benefits that can conveniently be classified into "consumption" and "investment." A product or service is considered to belong to the consumption category when it yields satisfaction (or utility) in a single period only. A pure investment product or service is expected to yield satisfaction in some future period only. In between, we have goods and services that are both consumption and investment goods--that is, they yield satisfaction now and can be expected to yield some satisfaction in the future. Education is a product that is best described as the "in between" classification. It yields satisfaction to the student at the time the education is consumed, and it also increases utility over time in the form of increased productivity and higher income. One example of the consumption benefits of schooling is what Perlman (1973) calls the "stigma-prestige effect" of college (p. 39). This refers to the prestige and status associated with college attendance. Most studies on the economic benefits of education have emphasized the investment component of education, especially the increased capacity to earn a higher income as result of higher education. The argument is that schooling and training increase people's productivity, which in turn increases their chances in a free market to obtain higher wages. Additionally, an individual who obtains more schooling (general education in particular) is more flexible in adapting to new job opportunities, thus providing a "hedge" against unemployment (Perlman, 1973). Education also yields social benefits or externalities. In this regard, improvements in education can help alleviate poverty both directly or indirectly by increasing income, improving health and nutrition, and reducing population growth rate. With respect to population growth rate, Psacharopoulos and Woodhall (1985) observe that improvements in education can help reduce family size as educated people tend to have smaller families. This in turn will reduce population growth rate. This is an important aspect especially in developing countries where population growth rate is still very high. Education also provides the means to an enlightened citizenry able to participate in democratic processes as well as pursuing democratic values such as equality, fraternity, and liberty at both private and social levels (Swanson & King, 1991). The assumption is that educated people are more likely to know their rights and those of others, a situation that fosters democracy. However, it should be noted that not all educated people embrace democratic values. In the next section I examine the importance of the human capital theory in educational planning and development.

Importance of the Human Capital Theory

The number of Nobel Prize awards on the subject succinctly demonstrates the importance of the Human Capital Theory. Sweetland (1996) observes that since 1971, five Nobel prizes have been awarded to scholars in or affiliated with the field of human capital theory: Theodore Schultz and Gary Becker, the two most pronounced scholars on the human capital theory; Milton Friedman and Simon Kuznets, who collaborated to publish an important article linking medical profession incomes to investments in education; and Robert Solow, who helped to identify the relatedness of education to aggregate production function. As a result, Human Capital Theory provides a powerful rationale that favors increased educational support and investment worldwide. In addition, the World Bank has largely based its educational policies on this theory (Pscharopoulos and Woodhall, 1985).

Furthermore, the human capital theory provides an empirical framework that measures the relationship between education investment and economic returns. In this regard, it is often used as a useful tool to uplift minorities or other disadvantaged groups as education--especially higher education--is seen as a powerful strategy for both sponsored and contest mobility. Sponsored mobility refers to a situation whereby parents or guardians use their resources and status to help their children to climb the social ladder. As a result, social mobility is achieved on the basis of initial status of parents/guardians. For example, children of educated parents are more likely to be highly educated because of parental influence. Contest mobility refers to efforts made by individuals to uplift themselves. Some children on their own can maneuver the system and achieve high educational status without much parental influence. Higher education plays an important role in both contest and sponsored mobility. As a result, higher education has often been considered as a critical strategy to uplift disadvantaged individuals and groups. This view is supported by Barringer, et al. (1990) who argue that, "Human [C]apital theory even more directly asserts the positive role of education in the advancement of minorities. It asserts that success in school and high levels of formal education increase the prospects for better paying, higher status and more satisfying employment." (p.28). However, human capital per se is not enough. For example, the theory does not adequately address structural barriers such as gender and race/ethnicity. Additionally, globalization has also negatively affected the importance of human capital theory. For example, Falk (2001) observes that although the skills associated with human capital are important in accessing and controlling the kinds of social factors that come with globalization, they are not enough to prepare individuals to cope with the knowledge explosion accompanying globalization. For example, moving from one country to another calls for adjustment in terms of culture and relevant skills required at the workplace. This means that one's human capital must be adjusted to fit the new environment. Despite the weaknesses associated with the human capital theory, the approach is still a useful analytical framework.

As a result, this approach has dominated American educational policy toward minorities. Advocates of Human Capital theory cite the high levels of both the educational achievement and economic success of Jews and Asian Americans in support of the theory. However, as Barringer et al. (1990) found out in their studies, higher education by itself is not enough to uplift minorities to reach the economic pinnacle equal to other racial groups. In their studies, Barringer et al. rejected the human capital theory because higher levels of education of Asian Americans were not translated into income parity with whites when other variables were accounted for. However, despite the White- Asian-American income disparity, their results partially collaborated the human capital thesis as they observed that education appears to be a useful channel to occupational prestige and to higher incomes for most Asian Americans. Barringer et al. (1990) further recognize the critical role of human capital in influencing upward mobility of minorities when they contend, "Despite the weaknesses of the human capital theory, it would be nevertheless be foolhardy to disregard the general importance of education and occupation in determining income in contemporary American society." (p. 41).

In view of the foregoing, one strategy that could enhance human capital is to improve the quality of education through capability education. My argument is that human capital deficient in relevant technical, conceptual and human relations skills is inadequate. As Livingstone observed (2001), human capital needs retooling--that is, improving its quality. This is also necessary to combat what Dore (1976) calls the "Diploma disease." In his book by the same name, Dore outlines the phenomenon known as "qualification escalation." He defines the phenomenon as the move toward achieving higher levels of education in order to stay competitive within the work environment. His analysis serves to raise several questions related to the usefulness of the current education system. Dore argues that within the current system of education, not all schooling is education because in same cases the focus is to churn out graduates, some of who are deficient in relevant skills. This view is supported by some employers who lament over deficiencies of some university graduates as prospective employees (e.g., Owen, 2001). In the next section I delineate the employers' reservations about some ill-equipped university graduates and the need for capability education.

Workplace Expectations and Capability Education

According to Candy and Crebert (1991), there is a growing gap between higher education and workplace expectations. One of the main criticisms that employers make of their new graduate employees is that they tend to emerge from university with their heads full of theories, principles and information but are often ill-equipped to deal with aspects of the workplace such as problem solving, decision making, working in a team, and interpersonal relationships. As a result, the new graduate entering an unfamiliar work setting is commonly confronted with "reality shock" (Arnold, 1985). On completion of their studies, most graduates usually possess a generalized education (one where a little is known about a lot) and not the specialized education (one where a lot is known a little) that the employer requires (Candy & Crebert, 1991).

With regard to deficiencies in higher education, Candy and Crebert say that higher education produces a student who is curriculum driven, used to solving problems in a theoretical fashion, used to expressing thoughts, ideas, opinions, and solutions in written form, introverted and isolated in study habits, used to working towards pre-set educational objectives, used to writing essays, reports, and assignments (often over a relatively long period of time), competitive on his or her own behalf (pursuing personal goals such as awards, accreditation, and prizes), and lacking in well-developed interpersonal skills (p. 590). On the other hand, the workplace requires the graduate to be used to solving problems in a practical, cost- and time --efficient way, able to use tools available to the industry, communicate orally, work with others as a team, and possess highly-developed interpersonal skills. Teaching students to acquire these skills is what I consider to be capability education.

The Australian Capability Network in Roberts (1999) defines capability education as "the combination of skills, knowledge, values and self-esteem which enables individuals to handle change. The capable person can cope with the unknown, be adaptable, flexible and move beyond competency" (p. 435). Stephenson and Weil (1992) again in Roberts delineate in greater detail the type of "capable" graduate universities should produce. They state, "Capable people have confidence in their ability to: take effective and appropriate action; explain what they are about; live and work effectively with others; continue to learn from their experiences, both as individuals and in association with others, in a diverse and changing society." (sic) (p. 436). Elaborating on these skills, Roberts states that attributes required of future graduates for career success include: communication skills, capacity to cope with change, thinking and decision-making skills, capacity to see 'see the big picture," leadership abilities, motivation to succeed, setting high standards for achievement, skills in managing staff, ability to develop new ideas and products, the ability to gain attention of senior managers, ability to work independently, social skills, expertise in using professional knowledge, variety of job experience and roles, and professional knowledge (p: 437).

The foregoing attributes appear to be applicable to nearly all fields. For example, Owen (2001) with reference to employers' expectations of geography graduates, delineates similar attributes. Employers want graduates who are self-starters, who can take ownership of their whole job, able to scope with their projects, and clarify the boundaries of their responsibility, and get on with the job. Graduates can also find a warm welcome if they can write clear and concise reports that senior managers can confidently use as decision-making tools. In addition, spelling mistakes and poor construction of English are an annoyance. Ability to adapt language to suit a variety of audiences is also an important skill used daily in business. Expectations in relation to information technology are high. Managers expect graduates to be a whiz at word processing, skilled at spreadsheets and downright impressive with databases. Graduates are also expected to be adept at decision-making. Research skills are also highly valued. Graduates are expected to be competent researchers as well as being able to present and report research findings. Employers expect graduates to be expert time managers and be able to deliver work on time. Finally, networking and relationship building have always been a key element of business. Therefore, graduates are expected to network with people at all grades and to give respect to those people whose educational attainments may not be at a comparable level.

To meet these challenges, universities must redesign their curricula and incorporate capability education skills. This is the biggest challenge for universities, especially in view of Zoglin's (1981) observation that in higher education, "There is no good information on how a curriculum is developed, who decides what will go into it and what will be left out. And what influences affect those who have the power to make decisions." (p. 415). Overall, it appears that comprehensive curriculum design is the Cinderella of higher education as courses are generally determined by individual instructors, sometimes with limited input from other instructors. This is quite the opposite of curriculum design in primary and secondary schools where curriculum design is a collective effort and reputable curriculum planning models are applied. However, given the critical importance of capability education skills, it is my hope that universities will be responsive enough.

Capability education is critical for both research universities as well as colleges and universities that focus on liberal arts disciplines. With respect to liberal arts McDowell (1996) says that it is important for the liberal arts to be fully integrated into professional and technical curricula in order to provide students with the complete education needed for the 21st century. Similarly, Tichenor (2001) notes that changes in the demands and needs of business and industry make incorporating technical and liberal arts a necessity. With respect to community colleges, Tichenor asserts that liberal arts and technical education must be blended. This important because technical training, problem-solving skills, writing, computer skills, and communication are the most commonly mentioned employment skills presently desired by employers (Tichenor, 2001). Dual emphasis on technical training and general studies, which is the thrust of capability education, is required to ensure gainful employment for students.

For most research universities, the current collaboration with industry is the way forward. For example, in Dunne and Collins (1995) give an example of how the University of Queensland (Australia) designed its curriculum in response to the concerns and wishes of Australian agribusiness employers and government policy of increased international competitiveness. The program's centerpiece was an internship in overseas market research. However, it is important for research universities continue to equip students with both basic and applied research skills.

As recommended by Candy and Crebert (1991), some of the foregoing capability education skills can be learned through apprenticeship and internships. Problem or project-based learning can also help enhance students' skills. It is also hoped that universities, through their relationships with business and industry, will give students numerous opportunities to acquire valuable workplace skills. Some universities are already doing an excellent job in this arena and what is now needed is to rejuvenate and sustain these practices.

Conclusion

In this paper I have delineated the human capital theory and the role it plays in the development process and social mobility. While a lot has been achieved in terms of equipping students with necessary skills for the workplace, more can still be achieved. This is critical in view of Candy and Crebert's (1991) observation that there is a growing gap between higher education and workplace expectations. As long as higher education is perceived as a truncated period of learning with its own styles divorced from the workplace, then the gap between higher education and the workplace will exacerbate. It is therefore important for universities to incorporate as much capability education as possible. As observed by Stark, Lowther, Sharp and Arnold (1997), the problem with higher education curriculum planning is that it appears like an individualized activity with limited collegial participation. However, it is important that faculty adopt a coordinated curriculum planning approach and consult their colleagues, the public, employers and the business community at large. Such coordinated approach is likely to meet the goals of capability education as well as being more responsive to a wider constituency.

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