human capital formation is essential for the developmentof a nation do you agree this statement ? substantiate your answer
Answers
Answer:
Human capital is a stock of skill and expertise of a nation at a particular point of time. The contribution of human skills and expertise towards economic growth and development is invaluable. This is because a stock of quality enriched human capital raises individual efficiency and productivity thereby raising the aggregate production and economic well being of a country. Thus, the importance of investment in enriching human capital is immense and long lasting.
Just as a country can turn physical
resources like land into physical
capital like factories, similarly, it can
also turn human resources like
nurses, farmers, teachers, students
into human capital like engineers and
doctors. Societies need sufficient
human capital in the first place—in
the form of competent people who have
themselves been educated and trained
as professors and other professionals.
In other words, we need good human
capital to produce other human capital
(say, nurses, farmers, teachers,
doctors, engineers...). This means that
we need investment in human capital
to produce more human capital out of
human resources.
Let us understand a little more of
what human capital means by posing
the following questions :
(i) What are the sources of human
capital?
(ii) Is there any relation between
human capital and economic
growth of a country?
(iii) Is the formation of human
capital linked to man’s all-round
development or, as it is now called,
human development?
(iv) What role can the government
play in human capital formation
in India?
5.3 SOURCES OF HUMAN CAPITAL
Investment in education is considered
as one of the main sources of human
capital. There are several other sources
as well. Investments in health, on- the-
job training, migration and information
are the other sources of human capital
formation.
Why do your parents spend money
on education? Spending on education
by individuals is similar to spending
on capital goods by companies with
the objective of increasing future
profits over a period of time. Likewise,
individuals invest in education with the
objective of increasing their future
income.
Like education, health is also
considered as an important input for
the development of a nation as much
as it is important for the development
of an individual.
Who can work better —a sick
person or a person with sound health?
A sick labourer without access to
medical facilities is compelled to
abstain from work and there is loss of
productivity. Hence, expenditure on
health is an important source of
human capital formation.
Work This Out
Ø Take three families from
different strata (i) very poor
(ii) middle class and (iii)
affluent. Study the
expenditure pattern of the
families on education of
male and female children.
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