2. • Population human resource training and skill
• Education dev and organized human resource
higher earning capacity
3. Difference b/w phy and human capital
• PHYSICAL CAPITAL
• Capital goods
• Tangible
• Produces tangible goods
• Separable from the owner
• PCF is economic and technical process
• Depreciation
• Completely mobile b/w countries
• HUMAN CAPITAL
• Stock of skill , ability , knowledge and edu
• Intangible
• Increases efficiency to produce tangible goods
• Inseparable
• HCF is social process
• Can be reduced
• Restrictions-culture , nationality
4. HUMAN CAPITAL FORMATION-
MEANING
• PROCESS of improvement in the knowledge , skill ,ability, and physical
capacity of the people.
• Dev of abilities and skill among the people
• Increase in no. of persons who have skill , education and experience
• Investment in people to make them more efficient , creative and more
productive resources.
5. SOURCES OF HCF
Expenditure on education
Expenditure on health
On – the- job training
Expenditure on migration
Expenditure on acquiring information
6. EXP ON EDUCATION
o Process of teaching ,training ,learning,in schools,colleges, to improve the knowledge and develop
skills.
o Imp source because----
Generates tech skills, create manpower which improve labour productivity,result in eco dev
Decline pop growth rate
More resources available per person
Social benefit
• Investment in education increase future income and improve living standard.
7. ROLE OF EDUCATION
o Improve learning capacity and ability to understand
o Analyse changes taking place in socio-economic environment
o Encourages research and innovations
o Modern outlook and rational behavior
o Enables one to make right choices in various aspects of life
8. EXPENDITURE ON HEALTH
o Sick labour abstain from work low productivity
o Health exp supply of healthy labour force high productivity
o TYPES: 1. preventive medicine: vaccination
2. curative medicine : medical interventions during illness
3. social medicine : spread of health literacy
4. provision of clean drinking water
5. good sanitation facilities
9. EXP ON ON –THE –JOB TRAINING
Learning while doing the work knowledge of actual work process
Becomes expert in the work greater efficiency and higher productivt
need –new technologies
Advantage : fast , less costly , increase productivity
Firm do exp
Return of such exp in the form of enhanced labour productivity is more
than the cost of it.
10. EXPENDITURE ON MIGRATION
• Better earning opportunities
• Enables to make better use of skill, kn , expertise
• Improves productivity and efficiency
• Larger output and income
11. EXPENDITURE ON MIGRATION
• People migrate in search of jobs
• Rural –urban migration due to unemployment
• Migration to other countries
• Migration involves cost of transport,living cost , psychic cost of living in a
strange socio- cultural set-up.
• Enhanced earnings in the new place outweigh the costs of migration.
12. EXP ON ACQUIRING INFORMATION
People spend to acquire information relating to the labour mkt
People seek info regarding salaries and other facilities available in diff labour
mkts.
Also wants to know edu institutions , health
13. ASSESSMENT
• Determine whether the capital listed is an example of PHYSICAL CAPITAL (P) or HUMAN CAPITAL
(H)?
1. Doctor
2. Bus
3. Factory
4. Teacher
5. Driver
6. School building
7. Manager
8. Train
14. ASSESSMENT
• FILL-IN
…………….capital benefits not only the owner but also the society in general.
• TRUE/ FALSE
Human capital is perfectly mobile between countries.
• MCQ
We need investment in human capital to produce :
a) More physical capital out of human resource
b) More human capital out of physical resources
c) More human capital out of physical capital
d) More human capital out of human resources.
