Human capital is generally reckoned to be the skills, knowledge, and experience possessed by an individual or population. It represents the value of our human capacities, and is what enables us to achieve our goals individually, or collectively in organizations and nations. It can be invested in through education and training, and can improve both the quality and the level of production. It has a rate of return that can be measured, albeit inexactly.

Gary Becker controversially compared the rates of return on human capital with the rates of return on children.

When human capital is abundant, rates of return on human capital investments are high relative to rates of return on children, whereas when human capital is scarce, rates of return on human capital are low relative to those on children. As a result societies with limited human capital choose large families and invest little in each member; those with abundant human capital do the opposite.

We have empirical evidence that people in poor countries have large families. They need the economic contribution the children will make to the family budget, and they need children to support them in old age. As societies grow richer there are more opportunities to educate and train children instead of putting them to work. Furthermore, social benefits, rather than children, can support the aged. These factors explain why wealthier societies have lower population growth. Indeed, most European populations are in decline, and it is immigration, rather than fertility, which contributes to those that are not.

It should be noted that the rate of return on human capital rises, rather than diminishes, as the human capital increases. The more there is of it, the more worthwhile it is to invest in it. This, in turn, implies better future production, both in quality and output. Resources can increase even if population rises, contrary to what Malthus thought.

The doomsayers tell us that a massively over-populated world will have neither the food nor the resources to cope, and predict wars and starvation. But set against them are the optimists, including Becker, who think that rising stocks of human capital will reduce population pressure and make more efficient use of resources. Yet again, Becker seems to be on the winning side.