StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

'Human capital' (economics) - Essay Example

Cite this document
Summary
It increases an employee’s value in the marketplace over time. Investment in training, both on the job and off the job, as well as education, medical facilities, fringe benefits…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96.5% of users find it useful
Human capital (economics)
Read Text Preview

Extract of sample "'Human capital' (economics)"

Economics August 23, What is “human capital,” and how does human capital affect labor productivity and economic growth? Human Capital refers to the skills acquired by employees through training and experience at work. It increases an employee’s value in the marketplace over time. Investment in training, both on the job and off the job, as well as education, medical facilities, fringe benefits etc. increases human capital. The state of human capital in a country determines its level of progress and its capabilities No matter how rich a country is in terms of its natural resources, but if it does not invest in its human capital there is little that it can do to progress.

Realizing the importance of human capital, countries especially in the West are investing an increasing amount of money in developing human capital. Labor productivity refers to the amount of output produced per unit time. It is a measure of economic growth for a country. One of the factors which are shown to contribute positively towards increased labor productivity is human capital. Several studies at the macro as well as the micro level have been conducted which show a positive relationship between the investment in human capital and productivity; i.e. the better the quality of human capital the higher the earnings as well as the capability to generate efficient output.

Studies by Becker (1964), Schultz (1961) and Miner (1971) have proven that there exists a positive relationship between human capital and labor productivity which then translates into higher economic growth. Investment in human capital increases workers’ efficiency and it helps produce better quality products at lesser costs which contribute to economic growth. Investment in human capital ensures that workers are aware of production methods and technologies. This prevents them from wasting precious business resources which enhances productivity.

When the labor productivity is higher, there is more output available for the country to market and sell. This increased capability then translates into higher local and international earnings thus speeding up economic growth. Recently, economies such as the Philippines, Malaysia and Thailand etc. have proven the importance of investing in human capital. These economies have sped up their economic growth rates tremendously by investing in education and training for its labor force thus highlighting the positive relationship between human capital, labor productivity and economic growth.

Works Cited1. “Human Capital”, Investorwords.com, Investorwords, n.d. Web. August 23, 20112. Jajri, I., Ismail, R., 2010, “Impact of Labor Quality on Labor Productivity and Economic Growth”, African Journal of Business Management, Vol. 4(4), pp. 486-495. AcademicJournals.org. PDF file.3. “Labor Productivity”, Investopedia.com, Investopedia, n.d. Web. August 23, 2011

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“'Human capital' (economics) Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
'Human capital' (economics) Essay Example | Topics and Well Written Essays - 500 words. Retrieved from https://studentshare.org/miscellaneous/1579161-human-capital-economics
('Human capital' (economics) Essay Example | Topics and Well Written Essays - 500 Words)
'Human capital' (economics) Essay Example | Topics and Well Written Essays - 500 Words. https://studentshare.org/miscellaneous/1579161-human-capital-economics.
“'Human capital' (economics) Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/miscellaneous/1579161-human-capital-economics.
  • Cited: 0 times

CHECK THESE SAMPLES OF 'Human capital' (economics)

Contribution of Education and Training to Economy

HUMAN CAPITAL EXPLANATION OF THE CONTRIBUTION OF EDUCATION AND TRAINING IN THE ECONOMY Date Human Capital Explanation of the Contribution of Education and Training in the Economy There has been consensus across board that education and training are critical to economy of any given country.... hellip; Most people agree that education and training contributes in various ways to the economic growth and development....
6 Pages (1500 words) Essay

The Role of Human Capital in Economic Growth

There have been many advances and breakthroughs since then in the field of human resource economics.... As UN's Economic and Social Commission for Asia and the Pacific (UNESCAP) in its report pointed out, “The human capital revolution in the economics of human resources in last quarter century has had a major impact on policy-making and planning for human resource development in the developing countries.... There can be little doubt that the impact of continuing developments in the economics of human resources will be an equally potent source of new approaches to human resource development in the next twenty-five years”....
9 Pages (2250 words) Research Paper

DREAM Act - Wise Investment in Human Capital and Economics of the USA

The paper "DREAM Act - Wise Investment in Human Capital and economics of the USA" concerns a legislative act designed to support talented immigrant students in obtaining an education, citizenship and decent work.... this item of expenditure may be offset by reducing doles and increasing income tax....
3 Pages (750 words) Term Paper

Capital Accumulation Issues

The paper "Capital Accumulation Issues" discusses the notion and various methods of capital accumulation for the company.... nbsp;In pristine terms, capital accumulation refers to the creation of wealth by nations.... This formation of wealth is generated through the productive use of assets.... hellip; Despite Marxist theories identifying capital accumulation as bourgeoisie and amassing of wealth by capitalists as anti-people, by way of subjugating poor and oppressed masses, it is an undeniable fact that this predominant concept of modern-day business has acquired added status and significance in the 21st century....
6 Pages (1500 words) Coursework

Improvement of the Human Capital in Canada

The paper "Improvement of the Human Capital in Canada" describes that the selection of policies seeking to eliminate poverty involves considering several aspects involved in the policy implementation.... Serious consideration of the essential elements involved establishes the most sustainable policy among many proposed policies....
5 Pages (1250 words) Research Paper

Economics of Human Capital

Within the macroeconomic perspective, many economists argue that the capabilities and knowledge of the workforce, including breakthroughs in production technology, are essential to economic development and to national and regional growth.... Until the latter part of the 1980s,… assical theories of economic development widely promoted the idea that both capital and labor were affected by ‘diminishing returns,' which implies that the insertion of additional capital or labor to the system produced increasingly reduced growth in output (Becker(b) 57)....
5 Pages (1250 words) Essay

An issue in the economic of human capital

economics of human capital is the ability of human beings to act within specific economies to capture the biological, physiological and even the cultural complexities in their economic transactions (Becker 2).... economics of human capital recognizes that not all labor is equal and it is important to invest on the employees to improve on their productivity.... One important issue in economics of human capital is hiring and recruitment....
5 Pages (1250 words) Essay

Economic Growth and Productive Capacity

om/economics/2015/06/03/nine-reasons-why-fed-economists-think-americans-arent-getting-a-raise/?... Economic growth can be well elaborated according to Leubsdorf as the increase in per capita gross domestic product (GDP) or another measure of aggregate income.... It is the quantity of goods and services produced....
2 Pages (500 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us