Difference between Physical Capital and Human Capital
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Human capital refers to the stock of skill and expertise of a nation at a particular point of time. On the other hand, physical capital refers to the stock of all the tangible assets, such as building, machinery tools etc. which are used in the process of production
Human capital and physical capital are distinguished on the basis of following points.
Basis of Difference
Human Capital
Physical Capital
1. Consists of
It consists of the skill and knowledge of the human beings.
It includes all the physical tools and machinery used for production.
2. Nature
It is intangible in nature.
It is tangible in nature.
3. Tradable
The services of human capital can be sold in the market, not the human capital.
Physical capital can be sold in the market.
4. Mutual Relationship
Human capital is not created by physical capital.
Physical capital is created by human capital.
5. Wear and Tear
Human capital does not depreciate except the age which is renewed again with education and health.
While, physical capital is depreciated over time due to constant use.
6. Benefits
Human capital creates both private as well as social benefits.
Physical Capital creates only private benefits.
7. Mobility
Human capital has relatively restricted mobility due to cultural and nationality obstacles.
Human capital refers to the stock of skill and expertise of a nation at a particular point of time. On the other hand, physical capital refers to the stock of all the tangible assets, such as building, machinery tools etc. which are used in the process of production
Human capital and physical capital are distinguished on the basis of following points.
Basis of Difference
Human Capital
Physical Capital
1. Consists of
It consists of the skill and knowledge of the human beings.
It includes all the physical tools and machinery used for production.
2. Nature
It is intangible in nature.
It is tangible in nature.
3. Tradable
The services of human capital can be sold in the market, not the human capital.
Physical capital can be sold in the market.
4. Mutual Relationship
Human capital is not created by physical capital.
Physical capital is created by human capital.
5. Wear and Tear
Human capital does not depreciate except the age which is renewed again with education and health.
While, physical capital is depreciated over time due to constant use.
6. Benefits
Human capital creates both private as well as social benefits.
Physical Capital creates only private benefits.
7. Mobility
Human capital has relatively restricted mobility due to cultural and nationality obstacles.
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