The version of human capital theory that underpins the education reforms assumes a direct linear relationship between education and national economic performance. Education is seen essentially as a productivity enhancer. Policy makers' assumptions that education is primarily a private good are examined, along with theories proposed as alternatives to human capital theory, i.e. screening theory and credentialism. We suggest that, while education is necessary for improved economic performance, it is not of itself sufficient, and that there are a number of workplace-related issues which impact on the ability of the workforce to apply their human capital effectively and efficiently.