Explain various sources of human capital formation.
Explain various sources of human capital formation.
Various sources of human capital formation are briefly explained below:
(a) Expenditure on education: Labour skill of an educated person is far more than that of an unskilled person. Individuals invest in education to increase their future income and raise the standard of living.
(b) Expenditure on Health: It is important to build and maintain a productive labour force and to improve the quality of life of people in society.
(c) Expenditure on Information: It is necessary to make decisions regarding investments in human capital as well as for efficient utilisation of the acquired human capital stock.
(d) On-the-job training: It increases the skill and efficiency of the workers and leads to an increase in production and productivity.
(e) Migration: It is a source of human capital formation as enhanced earnings in the migrated place is more than the increase in costs of migration.
Various sources of human capital formation are briefly explained below:
(a) Expenditure on education: Labour skill of an educated person is far more than that of an unskilled person. Individuals invest in education to increase their future income and raise the standard of living.
(b) Expenditure on Health: It is important to build and maintain a productive labour force and to improve the quality of life of people in society.
(c) Expenditure on Information: It is necessary to make decisions regarding investments in human capital as well as for efficient utilisation of the acquired human capital stock.
(d) On-the-job training: It increases the skill and efficiency of the workers and leads to an increase in production and productivity.
(e) Migration: It is a source of human capital formation as enhanced earnings in the migrated place is more than the increase in costs of migration.
