The theory of the human capital produced by the Chicago School and developed in the last forty years, although based on an ample definition, fixes as central point of the analysis the scholastic and post-scholastic education. It assumes in fact that the "traditional" education, providing knowledge, professional skills and capacity of problem analysis, allows increasing of worker's income and productivity.
Sahota (1978, p.14), in a survey on the personal income distribution theories, affirms: "… no income distribution theory can claim to be complete without taking the dynamic nature of human capital into full account. While there is little doubt that the human capital theory of income inequalities will go down in economic history as a turning point in general economic theory, its critics point out several shortcoming in it."
One of the criticisms moved by Sahota is on the assumption of individuals rational behavior, which should maximize the expected value of the future earnings stream.
He, in fact, affirms that, even if it is realistic to suppose that individuals perform a long run economic strategy, it is not acceptable that the rate of return, in such evaluations, is considered constant.
A second criticism, moved also by Griliches (1977), is based on the observation that, despite numerous studies analyze the human capital as cause of the personal earnings, the motivations, that lead the families and the individuals to invest in education (and therefore in human capital), are rarely analyzed.
Non institutional forms of education (es. education in family, trips etc.) are not considered too.
In the last edition of his famous book “Human Capital”, Becker stresses the importance of the family role in the education, in the knowledge and in the skills of progenies.
The families take decisions concerning the number of children based on their own income. The expenses that they sustain influence the investment in human capital: it exists, in fact, a negative relationship between such type of investment and the growth of the population.
Besides Mincer, in his studies, emphasizes how the institutional education explains no more than seven percent of the differences in earnings.
In conclusion earnings functions are an easy and flexible analysis tool of the investments in education, that, in the introduced formulation, do not require hardly available data. However considering the given definition, in author's opinion, they are not a suitable model for human capital analysis. First because earning functions don't consider adequately the unobservable component of human capital, secondary because they don't allow to estimate the latent variable human capital and to find its distribution among individuals.