The Pie: An Economics Podcast

Human Capital for Humans: An Accessible Introduction to the Economic Science of People

Nov 25, 2025
Pablo Peña, an economist from the University of Chicago and author of Human Capital for Humans, explores the surprising intersections of economics and everyday life. He argues that love is a key driver of economic growth and shares insights on how human capital theory applies to parenting, marriage, and health. Peña emphasizes the importance of parental investment in children and discusses the nuances of altruism versus market behavior. He also touches on how societal changes, like women's workforce entry, reshape economic dynamics in the modern world.
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INSIGHT

Behavior Follows Broad Shadow Prices

  • People respond to prices broadly understood as shadow costs, including time and alternatives, not just money.
  • Human capital is skills, health, and experience embedded in people that appreciates with investment and depreciates with disuse.
INSIGHT

Parental Love Is An Economic Force

  • Parental altruism acts like an interest rate shaping investment in children and drives macroeconomic growth.
  • Moral institutions (religion, ethics) substitute for contracts by encouraging children to repay parental investment.
INSIGHT

Sibling Allocation Shapes Inequality

  • Parents face efficiency versus equity in allocating investments between siblings, affecting inequality outcomes.
  • Families can mimic social insurance if they can ensure transfers between more and less able children.
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