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Human capital studies view the individual's stock of human capital as associated with his/her long-term nutritional intake level. Improvements in nutritional intake augment the stock of human capital, i.e., represent human capital formation, and food is seen as an investment good and not, as is more usual, as a consumption good.

Human capital theory was developed during the 1960's and 1970's by economists such as SCHULTZ (1971), BECKER (1975) and others, as it became clear that what explained economic growth was not just factors of production such as land, labor services, physical capital and technological change, but also the quality of labor services, i.e., the stock of human capital. Human capital theory was later incorporated into a more generalized theory of the allocation of time and goods over the life cycle (GHEZ and BECKER, 1975).

Investments in schooling, on-the-job training, health and nutritional status all increase an individual's human capital, which has both a physical and a mental dimension. An individual's stock of human capital is subject to deterioration over time due to factors associated with age, and to obsolescence of skills and knowledge. Investments in human capital may be complementary, and may produce a synergistic effect, as for instance when nutritional improvements take place in children attending school, improving the return on educational investments.

Studies which employ the human capital approach basically produce results for policy and program advocacy purposes, in that they attempt to measure what the rate-of-return is on different levels of investment in human capital. The measurement approach involves the assumption that earnings (or some other indicator of an individual's productivity) are proportional to an individual's stock of human capital. We can then operationally construct profiles of earnings by age for individuals with different stocks of human capital over their productive life cycle. By comparing, at a point in the life cycle, the present value of the earnings differential associated with different levels of investment in human capital, with the present value of the economic cost associated with higher levels of investment, we obtain the internal rate-of-return of different investment levels. Relevant CED studies have applied this analytical approach in the case of adult workers (IMMINK, VITERI and HELMS, 1982), or in relation to higher levels of intake in children and associated earnings profiles during the productive life cycle (BELLI, 1971; SELOWSKY, 1978; SELOWSKY and TAYLOR, 1973). The results from these studies are limited, since data on the economic costs associated with long-term higher intake levels were not available and thus internal rate-of-return analysis was not possible.

Table 1. Methodological aspects of human capital studies