Peter Webster, Chapter 6, Question 7

Chapter 6 starts off by asking why some people have private jets while others are living on the streets. It is a tough question because some people are born into tough situations and they have little education growing up. Some of those people drop out of high school and have no where to work. Wheelan says that these are the people who end up working at a McDonalds, Burger King, etc. Although that is not always true, Wheelan makes it clear that those with more human capital are going to get better jobs than working at a fast food chain. Wheelan gave an example of two different situations involving human capital. The first one, a guy with no skills comes to a farm town and tries to get a job. They send him out because there is no extra land to farm. In the second situation, a guy comes to town with his Ph.D. in agronomy. He created a new plow that improves corn fields. So he gives farmers his plow for a share of their harvests. This way everyone is well off because the smart guy has enough money and the farmers have more money because they have more corn. They can use that money to tutor their children (creating a new job) and give them more work opportunities when they are older. Human capital is very important to the economy, and that's why people are willing to pay so much to get a good education.