what is education in human capital
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help the people To lead a educated society to get a profitable good job
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Tunis – The close relationship between human capital[1] and economic growth is undeniable. Human capital is affected directly and indirectly by education which plays an important role in both accumulating human capital and increasing economic growth.
Hundreds of economic studies have focused on the duality between human capital and the economy of a country. However, explanations for this duality differ from one economist to another.
Human Capital Theory is the most influential economic theory of education, and it becomes a key determinant for economic performance.
In the Wealth of Nation, Adam Smith (1776) included human capital in his definition of capital. A. Marshall has emphasized the significance of skills and knowledge as an important tool for economic development.
This concept was forgotten by economists until the 1960s, when it was adopted by Theodore W. Schultz (1960), for the first time. Becker (1964), and Mincer (1984) deepened this concept and showed how the concept of investment in human capital could influence future real income through embedding resources (skills and knowledge) in individuals.
Studies proposed by Mankiw, Romer, and Weil (1992) and Lucas (1988) stress the essential role of education as the most important production factor in increasing human capital as a determinant of economic growth, by helping individuals acquire knowledge which encourages participation in groups, opens doors to job opportunities, develops social interactions, makes individuals aware of their rights, improves health, and reduces poverty.
Nelson & Phelps (1966) and Benhabib & Spiegel (2005) emphasize that education can facilitate the sharing and transmission of knowledge needed for developing new technologies. For instance, nations without enough human capital could not manage effectively their physical capital.
All of those approaches have in common that growth has also been positively affected by education.
The main subject of this paper is to emphasize the powerful effects of education on human capital accumulation and then on economic outcome. In fact, many studies do not support the conclusion that the correlation between education and economic growth is significant. However, they found a significant negative relationship between human capital and economic growth (Pritchett, 1991). This negative effect was due to a lack of human capital measures: empirical researches are more interested in years of schooling (quantity) than quality. This appears logical because the quantity is easily measured, but at the same time it is very crude, and falsifies the reality of the human capital.
Most research on the economic aspects of schooling concentrates only on the quantity of schooling (school attainment) and neglects the importance of the quality of education because it cannot be easily measured.
For instance, education in Mali is not the same as education in the UK or Norway. Developing countries characterized by very bad quality of education. On the contrary, good quality education is the objectives of developed countries.
To sum up, we believe that is necessary to measure the amount of human capital available in a nation, but it would be best to determine quality rather than quantity of education.
[1] The term “Human Capital” first appeared in 1961 by Nobel-prize winner economist Theodore W. Schultz, in his article ‘’Investment in Human Capital’’.
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Hundreds of economic studies have focused on the duality between human capital and the economy of a country. However, explanations for this duality differ from one economist to another.
Human Capital Theory is the most influential economic theory of education, and it becomes a key determinant for economic performance.
In the Wealth of Nation, Adam Smith (1776) included human capital in his definition of capital. A. Marshall has emphasized the significance of skills and knowledge as an important tool for economic development.
This concept was forgotten by economists until the 1960s, when it was adopted by Theodore W. Schultz (1960), for the first time. Becker (1964), and Mincer (1984) deepened this concept and showed how the concept of investment in human capital could influence future real income through embedding resources (skills and knowledge) in individuals.
Studies proposed by Mankiw, Romer, and Weil (1992) and Lucas (1988) stress the essential role of education as the most important production factor in increasing human capital as a determinant of economic growth, by helping individuals acquire knowledge which encourages participation in groups, opens doors to job opportunities, develops social interactions, makes individuals aware of their rights, improves health, and reduces poverty.
Nelson & Phelps (1966) and Benhabib & Spiegel (2005) emphasize that education can facilitate the sharing and transmission of knowledge needed for developing new technologies. For instance, nations without enough human capital could not manage effectively their physical capital.
All of those approaches have in common that growth has also been positively affected by education.
The main subject of this paper is to emphasize the powerful effects of education on human capital accumulation and then on economic outcome. In fact, many studies do not support the conclusion that the correlation between education and economic growth is significant. However, they found a significant negative relationship between human capital and economic growth (Pritchett, 1991). This negative effect was due to a lack of human capital measures: empirical researches are more interested in years of schooling (quantity) than quality. This appears logical because the quantity is easily measured, but at the same time it is very crude, and falsifies the reality of the human capital.
Most research on the economic aspects of schooling concentrates only on the quantity of schooling (school attainment) and neglects the importance of the quality of education because it cannot be easily measured.
For instance, education in Mali is not the same as education in the UK or Norway. Developing countries characterized by very bad quality of education. On the contrary, good quality education is the objectives of developed countries.
To sum up, we believe that is necessary to measure the amount of human capital available in a nation, but it would be best to determine quality rather than quantity of education.
[1] The term “Human Capital” first appeared in 1961 by Nobel-prize winner economist Theodore W. Schultz, in his article ‘’Investment in Human Capital’’.
Hope this will be helpful to you...
Plz mark it as BRAINLIEST
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