HUMAN CAPITAL FORMATION - Education for free

HUMAN CAPITAL FORMATION - CLASS 12 ECONOMICS

1.  PHYSICAL CAPITAL  includes inputs which are required for the production like plant and machinery, raw materials,   etc..

2.HUMAN CAPITAL refers to the stock of skill, ability ,expertise, education. and knowledge  embodied in the people. Human capital is needed to make effective use of physical capital.

3. CAPITAL FORMATION refers to development of abilities and skill among the population of country.

• SOURCES OF HUMAN CAPITAL FORMATION

1. Expenditure on education:  educated person is more than that of an uneducated person. individuals invest in education to increase the future income and raise the living standard.

2. Expenditure on health:  it is important to build and maintain productive labour force and to improve quality of life of people in the society.

3.  on the job training:  it increases the skill and efficiency of workers and leads to an increase in production and productivity.

4. Expenditure on Migration:  source of human capital formation as enhance awnings in the migrated place is more than the increase in cost due to migration.

5. Expenditure on Information:  necessary to make decision regarding investment in human capital as well as for efficient utilisation of the acquired human capital stock.

• IMPORTANCE OF HCF

 1 effective use of physical capital

 2 higher productivity and production

 3. Innovation and create ability to absorb new technologies

4.  modernization of attitudes

5.  increases life expectancy and improve quality of life

6.  control of population growth

• PROBLEMS OF HCF

1.  insufficient resources

2.  serious inefficiencies

3.  Brain drain

4.  High growth of  population

5.  several imbalances

6. lack of proper manpower planning

7.  weak Science and Technology

• HUMAN CAPITAL VS HUMAN DEVELOPMENT

 1 Human capital considered as education and health as a means to increase labour productivity while according to human development education and health and integral to human being.

2.  human capital reach human being as a means to increase in productivity while according to human development human beings are ends in themselves.

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Note: The work is collected from various sources and author does not claim over work.