definition and characteristics of human capital development
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Human Capital is a measure of the skills, education, capacity and attributes of labour which influence their productive capacity and earning potential.
According to the OECD, human capital is defined as:
“the knowledge, skills, competencies and other attributes embodied in individuals or groups of individuals acquired during their life and used to produce goods, services or ideas in market circumstances”.
Individual human capital – the skills and abilities of individual workers
Human capital of the economy – The aggregate human capital of an economy, which will be determined by national educational standards.
Every employee brings a different value of human capital to the workforce. Human capital, as we discussed, is characterized by factors such as a person's experience, tenure, education, training, and health. For example, the earnings of a person with a college education have shown to be higher in most cases than a person with less education. Also, a person's experience in a certain industry can add value to that person's human capital compared to a new entry. Consider Tom. He has worked in the engineering industry for thirty years, and his experience offers value to a new company because he knows how the industry works and its history.
Human capital theory derives from what we might call neo-classical economics, which separates economic activities from social activities, almost as though the economy is a separate world outside of society itself, and it assumes people act in generally rational and intentional ways at all times. A lot of the nuance of human activities and social meaning is lost in this view of the world. Human capital theory also tries to make very universal statements and doesn't concern itself with more discrete or specific explanation of less general phenomena.
According to the OECD, human capital is defined as:
“the knowledge, skills, competencies and other attributes embodied in individuals or groups of individuals acquired during their life and used to produce goods, services or ideas in market circumstances”.
Individual human capital – the skills and abilities of individual workers
Human capital of the economy – The aggregate human capital of an economy, which will be determined by national educational standards.
Every employee brings a different value of human capital to the workforce. Human capital, as we discussed, is characterized by factors such as a person's experience, tenure, education, training, and health. For example, the earnings of a person with a college education have shown to be higher in most cases than a person with less education. Also, a person's experience in a certain industry can add value to that person's human capital compared to a new entry. Consider Tom. He has worked in the engineering industry for thirty years, and his experience offers value to a new company because he knows how the industry works and its history.
Human capital theory derives from what we might call neo-classical economics, which separates economic activities from social activities, almost as though the economy is a separate world outside of society itself, and it assumes people act in generally rational and intentional ways at all times. A lot of the nuance of human activities and social meaning is lost in this view of the world. Human capital theory also tries to make very universal statements and doesn't concern itself with more discrete or specific explanation of less general phenomena.
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