Explain the principal role of human capital formation in accelerating rate of economic growth
Answers
Human capital and economic growth goes hand in hand. Human capital formation accelerates economic growth whereas economic growth in turn facilitates human capital formation. The interrelationship between economic growth and human capital formation can be explained with the help of below mentioned points.
Human capital and economic growth goes hand in hand. Human capital formation accelerates economic growth whereas economic growth in turn facilitates human capital formation. The interrelationship between economic growth and human capital formation can be explained with the help of below mentioned points.Increase in the productivity of physical capital: Physical capital refers to the stock of produced means of production .It consists of machines, production plants, tools and equipments. The skilled workers handle the productive assets in such a manner that these not only enhance their productivity and but also lead to an efficient utilization of the physical capital. When the productivity increases, the pace of growth is automatically accelerated.