Human capital on economic growth (Article) - Group F

Group- F

Human Capital

Human capital refers to the skills and knowledge possessed by an individual. It is viewed in terms of their value and cost to the business organization. Human capital formation can be increased by investing more in education sector and promoting the importance of gaining knowledge and skill. A measure of labour’s capabilities, including skills, working capacity, education, health, and intelligence, is referred to as Human Capital. The concept of human capital emphasises the idea that not every resource is created equal, but that this difference may be covered with the right training and funding. 

An educated person makes a greater contribution to economic growth than an illiterate person. Similarly, a healthy person contributes to a longer period of uninterrupted labour supply, which supports economic growth. Thus, a person’s ability to generate income can be increased by different factors like education, health, on-the-job training, job market information, and migration. High levels of human capital are built as a result of higher income and Income increases with the rise in the level of human capital.

                             

 

Role of human capital on economic growth

• Human capital builds the rate of cooperation in the workforce causes a rise in the level of production.
• Human capital boosts the productivity of physical capital as skillful and professional operative it leads to boosted productivity paves a way to economic growth
• Higher Rate of Contribution and Equality, it leads to the increment in employment rate and a decline in wealth imbalance are indicators of economic development.
• Human capital encourages the advancement of new techniques for production and this results in the increase of economic development in the shape of an increase in GDP.