Where is the return on investment in human capital observed
A)in the wage rate of university professors
B)in the wage differential between workers
C)in the high school dropout rate in inner-city urban school districts
D)in the low wages of educated factory workers

Question

Quizplus · Accepted Answer

The return on investment in human capital is observed through the wage differential between workers. This means that workers who have more education and skills are able to command higher wages than those without as much education and fewer skills. This is because the more educated and skilled workers are more productive and contribute more to the success of the firm, so they are rewarded with higher wages. The wage rate of university professors is not necessarily indicative of the return on investment in human capital, as they may also receive high wages due to other factors such as their research and publication record. The high school dropout rate in inner-city urban school districts is a negative outcome that suggests a lack of investment in human capital, rather than a return on investment. The low wages of educated factory workers may be due to factors such as competition from low-wage countries and the decline of manufacturing jobs in the United States, rather than a lack of return on investment in human capital.

Where Is the Return on Investment in Human Capital Observed