What are the two major sources of human capital in a country?
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. The following are the two prime ways o
to develop human capital qualitatively:
i. Investment in Educational Sector:
Education not only raises the standard and quality of living but
also encourages modern attitude of the people. Moreover,
education increases the productive capacity and productivity of a
workforce by honing their skills. Further, education increases
the acceptability of modern techniques and also facilitates a
primitive economy to break the shackles of tradition and
backwardness. An investment in educational sector has two fold
benefits. It not only increases the income earning capacity but
also reduces the skewed distribution of income thereby forming an
egalitarian society. The investment in educational sector has
long lasting returns. It not only enhances the present economic
condition but also improves the future prospects of a country.
The importance of education is not only limited to making people
educated. but also in facilitating an underdeveloped economy to
solve different but interrelated macro economic problems like,
poverty, income inequality, population, investments, under
utilisation of resources. Therefore, investment in education must
be accorded high priority in an underdeveloped country as it
leads to the enhancement of human capital qualitatively.
ii. Investment in Health Sector: There
is a saying “The
greatest wealth is
health”. The wealth of a
country can be increased with the efforts of healthy workforce.
Investment in health sector increases efficiency, efficacy and
productivity of a
workforce. In contrast to an unhealthy person, a healthy person
can work better with more efficiency and, consequently, can
contribute relatively more to the GDP of the country. Good health
and medical facilities not only increase life expectancy but also
improves quality and standard of life. Investment in health
sector ensures the perennial supply of healthy workforce. Some of
the common expenditures incurred in the health sector are on
providing better medical facilities, easy availability of life
saving drugs, common vaccination, spread of medical knowledge,
provision of proper sanitation and clean drinking water, etc.
Thus, the expenditure incurred on health is important in building
and maintaining a productive work force that in turn leads to the
development of quality human capital in a country.
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