This book provides an introduction to earnings capacity (EC), a measurement of human capital, and its application to a research study of potential earned annual income over a 25-year period. Focus is on qualitative aspects of EC such as race, age, gender and education and its utilization. Chapter 1 is an introduction. Chapter 2 reviews existing measures of economic potential, such as gross domestic product. Chapter 3 presents a series of questions about human capital and its measurement. Chapter 4 is a literature review. Chapter 5 defines and describes the EC estimation tool, the sample studied, and the time frame. Chapter 6 presents research findings of the estimation of the level and trend of aggregate EC since 1975, relating those findings to education and involuntary as well as voluntary unemployment. Differences between the latter two conditions in terms of economic and social implications are discussed. Chapters 7 and 8 presents patterns of human capital levels and trends, utilization, and the sources of unutilized human capital by subgroups of the population. Chapter 9 is a summary and conclusion with additional material on human capital utilization of minority youths and the older working-age population. There are 70 figures and tables. The bibliography lists 91 references. The 3 appendices include procedures for estimation of EC and attribution of unrealized potential earnings to its sources. (AJ)