Does Human Capital Theory Account For Individual Higher Education Choice?

South African higher education policy evidently assumes a human capital interpretation of the value of higher education. However, not much local evidence has been provided to support the human capital view that individuals enroll in higher education primarily on the basis of future earnings they expect to flow from such investments. This paper suggests that one reason for this circumstance is that neoclassical economic epistemology, human capital theory’s philosophical paradigm, cannot deal comfortably in the currency of expectations. The paper argues that individual choice can be understood only on the variable ground of human expectations, perceptions and beliefs. Such terrain is, however, not ideally suited to neoclassical economic analysis, so traditional human capital theory relies on improbable assumptions about human behaviour to model educational choice. The discussion proposes that it is not necessary to employ a neoclassical analytical framework to demonstrate that individuals’ enrolment decisions may be sensitive to their anticipated returns to higher education investments. This case study, within a qualitative research design and using principal components analysis of a purposive sample of Durban University of Technology first year students’ attitudes and perceptions relating to higher education, sought to establish whether their expected returns to higher education investments are significantly associated with their enrolment choices. Using binomial logistic regression analysis, respondents’ anticipated private rates of return were shown to be a significant consideration in respect of their higher education choices. This finding, the product of qualitative analysis, affirms the human capital theory proposition that individuals regard higher education as an investment, that is, as a risk versus return prospect