This document provides an overview of human capital including its economic perspective, sources, pillars, and indexes. It discusses human capital indexes for top countries including India. The four pillars of human capital are education, health, workforce/employment, and enabling environment. India ranks 78th out of 122 countries on the overall human capital index, with relatively low scores in health and the enabling environment. The document concludes by noting the importance of human capital for development and identifying challenges to improving human capital in India like population growth and lack of education and health facilities.

1. 1

2. AN OVERVIEW OF HUMAN CAPITAL INDEX
2

3. • INTRODUCTION
• ECONOMIC PERSPECTIVE OF HUMAN CAPITAL
• ROLE OF HUMAN CAPITAL FORMATION
• SOURCES OF HUMAN CAPITAL
• FOUR PILLARS OF HUMAN CAPITAL
• HUMAN CAPITAL INDEX FOR TOP TEN COUNTRIES
• STATUS OF HUMAN CAPITAL IN INDIA
• PROBLEMS OF HUMAN CAPITAL IN INDIA
• CONCLUSION
• REFERENCE 3

4. Introduction
• Human capital collectively represent the wealth of an individual or
business.
• Human capital is the stock of knowledge, habits, social and
personality attributes, embodied in the ability to perform labour so
to produce economic value.
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5. Economic Perspective of Human Capital
• Economic perspective of Human Capital Refers to factors of
production used to create goods or services.
• Thus, human capital is one of production elements which
generate added-values.
5

6.  Human capital as knowledge and skills obtained by people as capital
in the process of vocational and technical education.
 Such a capital is a product of well considered investments and it
generates income.
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7.  Increases production - Knowledgeable , skilled , qualified persons
can contribute their maximum to the economy. They can increase
production through optimum utilization of resources .
 Increases productivity – It promotes innovations , creativity and new
technology so that maximum possible time and cost.
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8.  Improve quality of life: Human capital formation focuses on
quality of population , better the quality of population more will
be the economic growth and development .
 Creates positive attributes – People with positive attributes are
more open to creativity and innovations and are rational in their
decision making .
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9. • Education
• Health
• On-the-Job-Training
• Migration
• Information
9

10.  Spending on education by individuals is similar to
spending on capital goods by companies with the
objective of increasing future income over a period
of time.
 Likewise, individuals invest in education with the
objective of increasing their future income.
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11.  Health is important for the development of an individual.
 Medicines, provision for clean drinking water and good
sanitation are various forms of health expenditures.
 Health expenditure directly increases the supply of healthy
labor force a source of human capital formation.
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12.  Firms spend on on-the job-training to their workers, this may
take different forms.
 The workers may be trained in the firm itself under the supervision of
a skilled worker.
 The workers may be sent for off-campus training.
 Expenditure regarding on-the-job training is a source of human
capital formation as the return of such expenditure in the form of
enhanced labor productivity is more than the cost of it.
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13.  People migrate in search of jobs that fetch them higher
income than what they may get in their villages.
 Engineers and doctors, migrate to other countries because of
higher salaries.
 The enhanced earnings in the new place outweigh the costs of
migration; hence, expenditure on migration is also a source of
human capital formation.
13

14. People spend money to acquire information relating to the
labour market including education and health.
This is necessary to make decisions regarding investments in human
capital as well as for efficient utilization of the acquired human
capital stock.
 Expenditure incurred for acquiring information relating to the
labour market and other markets is also a source of human capital
formation.
14

15.  The Education pillar contains indicators relating to
quantitative and qualitative aspects of education across primary,
secondary and tertiary levels and contains information on both
the present workforce as well as the future workforce.
 The Health and Wellness pillar contains indicators relating to
a population’s physical and mental well– being, from childhood
to adulthood.
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16.  The Workforce and Employment pillar is designed to quantify
the experience, talent, knowledge and training in a country’s
working–age population.
 The Enabling Environment pillar captures the legal framework,
infrastructure and other factors that enable returns on human capital.
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17. Sub-Pillar Indicator Weight
1. Access Primary enrolment rate (%) 2.08
Secondary enrolment rate (%) 2.08
Tertiary enrolment rate (%) 2.08
Education gender gap 2.08
2. Quality Internet access in schools 2.08
Quality of education system 2.08
Quality of primary schools 2.08
Quality of math and science education 2.08
Quality of management schools 2.08
3. Attainment Primary education attainment (% population age 25+) 2.08
Secondary education attainment (% population age 25+) 2.08
Tertiary education attainment (% population age 25+) 2.08
Total Pillar
Weight
25.00
17
Source: Human Capital Index 2013.

18. Sub-Pillar Indicator Weight
1. Survival
Infant mortality (per 1.000 live births) 1.79
Life expectancy 1.79
Survival gender gap 1.79
2. Health
Stunting and wasting (% in children under 5) 1.79
Unhealthy life year (% of life expectancy) 1.79
Deaths under 60 from non-communicable diseases 1.79
Obesity (% of adults with BMI ≥30) 1.79
Business impact of non-communicable diseases 1.79
Business impact of communicable diseases 1.79
3. Well-being
Stress (% of respondents) 1.79
Depression (% of respondents) 1.79
4. Services
Water sanitation and hygiene 1.79
Healthcare quality 1.79
Healthcare accessibility 1.79
Total Pillar Weight 25.00
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Source: Human Capital Index 2013.

19. Sub-Pillar Indicator Weight
1. Participation
Labour force participation rate, age 15-64 (%) 1.56
Labour force participation rate, age 64+ (%) 1.56
Economic participation gender gap 1.56
Unemployment rate 1.56
Youth unemployment rate 1.56
2. Talent
Country capacity to attract talent 1.56
Country capacity to retain talent 1.56
Ease of finding skilled employees 1.56
Pay related to productivity 1.56
Capacity for innovation 1.56
Index of economic complexity 1.56
Firm level technology absorption 1.56
Scientific and technical journal articles 1.56
Median age of the working population 1.56
3. Training Staff training 1.56
Training Services 1.56
Total Pillar Weight 25.00
19
Source: Human Capital Index 2013.

20. Sub-Pillar Indicator Weight
1. Infrastructure Mobile users 2.78
Internet users 2.78
Quality of domestic transport 2.78
2. Collaboration State of cluster development 2.78
Business and university R&D collaboration 2.78
3. Legal framework Ease of doing business 2.78
Social safety net protection 2.78
Intellectual property protection and property rights 2.78
4. Social mobility Social mobility 2.78
Total Pillar Weight 25.00
Source: Human Capital Index 2013.
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21. Rank Score Rank Score Rank Score Rank Score Rank Score
1 1.455 4 1.313 1 0.977 1 1.736 2 1.793
2 1.406 1 1.601 9 0.844 3 1.250 1 1.926
3 1.232 3 1.348 13 0.762 2 1.345 5 1.471
4 1.161 7 1.106 4 0.901 8 1.150 4 1.484
5 1.111 14 0.977 2 0.960 6 1.154 10 1.351
21
Source: Human Capital Index 2013.

22. Overall index Education Health and
wellness
Workforce and
employment
Enabling
environment
6 1.109 19 0.888 8 0.877 9 1.149 3 1.522
7 1.104 15 0.970 6 0.890 5 1.182 8 1.373
8 1.042 10 1.031 17 0.682 10 1.072 7 1.384
9 1.024 18 0.891 3 0.943 12 0.932 11 1.330
10 0.987 2 1.355 20 0.548 15 0.875 17 1.168
Source: Human Capital Index 2013. 22

23. Source: Human Capital Index 2013.
23

24. 24
Source: Human Capital Index 2013.

25. 25
Source: Human Capital Index 2013.

26. 26
Source: Human Capital Index 2013.

27. 27
Source: Human Capital Index 2013.

28. Source: Human Capital Index 2013
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29. Low income Lower-middle
income
Upper-middle
income
High income
Rank country score Rank country score Rank country score Rank country Score
81 kenya -0.306 50 Sri Lanka 0.020 22 Malaysia 0.644 1 Switzerla
nd
1.455
92 Kyrgyz
Republic
-0.440 53 Indonesia 0.001 35 Costa
Rica
0.320 2 Finland 1.406
96 cambodia -0.505 63 Ukraine -0.124 42 Panama 0.207 3 Singapore 1.232
103 Malawi -0.629 66 Philippine
s
-0.161 43 China 0.186 4 Netherlan
ds
1.161
104 Tanzania -0.680 70 Vietnam -0.202 44 Thailand 0.158 5 Sweden 1.111
105 Madagasc
ar
-0.725 73 Armenia -0.218 45 Kazakhsta
n
0.124 6 Germany 1.109
106 Uganda -0.727 77 Georgia -0.258 47 Mauritius 0.099 7 Norway 1.104
110 Banglade
sh
-0.782 78 India -0.270 52 Jordan 0.005 8 United
Kingdom
1.042
Source: Human Capital Index 2013.
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30. Human Capital Index 2013 Rank/122 score
Overall Ranking 78 -0.270
Education 63 0.020
Health and wellness 112 -0.868
Workforce and employment 49 0.005
Enabling environment 67 -0.239
Source: Human Capital Index 2013.
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31. Fig. 7 :
Source: Human Capital Index 2013.
31

32. Source: Human Capital Index 2013
32

33. Figure 9: Relationship between Global Competitiveness Index and Human
Capital Index In the World
Source: Human Capital Index 2013.
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34. Source: Human Capital Index 2013.
34

35. Source: Human Capital Index 2013.
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36. 36
1
3
2
4
5
Source: Karnataka Human Development Report 2005
The Human Development Index for top five districts of Karnataka (2001)

37. District
Indicator
HDI
Health Education Income
Index Rank Index Rank Index Rank Value Rank
Bangalore Urban 0.705 5 0.887 1 0.666 1 0.753 1
Dakshina Kannada 0.707 3 0.823 4 0.636 2 0.722 2
Udupi 0.713 1 0.842 2 0.588 5 0.714 3
Kodagu 0.638 18 0.833 3 0.621 3 0.697 4
Shimoga 0.707 4 0.766 6 0.547 10 0.673 5
Source: Karnataka Human Development Report 2005
Table 8 : The Human Development Index for top five
districts of Karnataka (2001)
37

38. Table 9 : Five top and bottom ranking districts in HDI: 2001
and 1991
Source: Karnataka Human Development Report 2005 38

39. • Increase in population
• Flawed investment in education
• Lack of health facilities
• Lack of on the job training
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40.  The Human Capital Index seeks to create greater awareness among
a global audience of human capital as a fundamental pillar of the
growth, stability and competitiveness of nations.
 Human Capital is the backbone of Human Development and
economic development in every nation.
 Human Capital need motivation to raise their value and
performance.
40

41. • http://en.wikipedia.org/wiki/Human capital
• http://www3.weforum.org.
• frcatel.fri.uniza.sk/hrme/files.
• Karnataka Human Development Report 2005
• http://reports.weforum.org/human-capital-index-2013.
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