Neoclassical theory appeared to be vindicated with the publication in 1964 of Gary Becker's book on human capital theory. Becker's human capital approach, for which he was awarded a Nobel Prize in economics in 1993, argued that workers could upgrade their economic status if they made the rational individual choice to invest in more education and skill training. Once completed, their marginal productivity would increase and competitive pressures within the labor market would operate to raise their income. If they chose to do otherwise, it signaled that they somehow preferred the existing distribution of wages and were willing to live with its consequences, no matter how inequitable. Armed with human capital theory, confident neoclassical labor economists entered the realm of empirical research intent on explaining the persistence of inter- and intra-industry differentials among workers with identical productive characteristics. They anticipated the restoration of marginal productivity theory to its former prominence, arguing that wage differentials simply reflected individual differences in skill and effort, hence productivity. Liberal economists also jumped on the bandwagon, viewing human capital theory as a means for justifying larger government expenditures on training programs for the poor and disadvantaged.
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