class-1
In this chapter……..
- concepts of:
- Human Resource
- Human Capital Formation
- Human Development
- links between:
- investment in human capital VS economic growth
- investment in human capital VS human development.
- human development VS economic growth.
- Need for govt. expenditure on education & health.
- India’s educational attainment?
Alfred Marshall: expending public and private funds on education should not to be measured by its direct fruits alone.
- sources of human capital?
- relation between human capital and economic growth of a country?
- human development?
- Govt. role for human capital formation in India?
- One major factor for evolution of mankind; capacity to store knowledge & transmit (through conversation, songs & lectures)
- training and skill make effective this task;
- Labor skills, income generation, contribution to E. Growth; educated person > uneducated P.
- Education for: higher earning capacity + higher earning capacity & pride, better choices in life, knowing changes in society, stimulate innovations, adopt new technologies, accelerate development in nation (So economists stress on edu. Exp.)
- KNOW ABOUT HUMAN CAPITAL?
- Country turns:
- Physical resources (land) into physical capital (factories) similarly
- human resources (nurses, farmers, teachers, students) into human capital (engineers, doctors)
- Societies need sufficient human capital (competent people; Professors) + Investment to convert HR into other Human capital (Dr. Er.)
- Human capital means: Refers to stock of knowledge, talent, skills & abilities brought in by the employee, to the organization
- SOURCES OF HUMAN CAPITAL
- To convert a human resource into human capital we need INVESTMENT ON:
- Education (Main Source); to increase income in future like companies invest on capital goods (machines) for profit in future.
- Health; Important input for development of a nation & individual, Productivity; Healthy person > Sick, health expenditure’s forms: Preventive medicine, curative medicine, social medicine.
- job training: By firms; in different forms: In situ-through skilled worker, Ex situ- off-campus training.
- Firms recover this expenditure in future so insist to work for a specific period.
- Enhanced productivity > expense on training; So it’s a source of human capital formation.
- Migration: (Pull) for better opportunities; salary.
- Rural-urban migration; cause – Unemployment.
- External Migration; cause-higher salaries (Dr., Er.; Technically qualified)
- It requires cost of transport, living in migrated places, psychic in a strange sociocultural setup.
- Why expenditure on migration is also a source of human capital formation ?
- costs of migration < enhanced earnings in the new place.
- To acquire Information: Through survey collecting info regarding labour market, education, health etc.
- knowing salaries for diff. jobs to make decisions regarding investments in human capital.
- Such expenditure to collect info < Real expenditure required to convert people as HC.
- Relationship b/w physical capital and human capital; Similarities & Dissimilarities:
- physical capital as base for human capital:
- Both are the forms of capital formation & outcomes of conscious investment decisions.
HUMAN CAPITAL AND ECONOMIC GROWTH:
- Contribution in NI + Own Income/ economic growth : S/W Professional > worker; labour skill > uneducated person;
- Like this Healthy vs Un healthy and training, market information & migration increase contribution in NI & ind. Income.
Contribution of Human Capital: increases labour productivity, stimulates innovations, creates ability to absorb new technologies.
As a One Source Of Human Capital; Education provides: knowledge to understand changes in society & knowledge to understand changes in society, inventions and innovations +
Human capital causes economic growth ?
- Still we don’t have Empirical evidence to prove this, because of measurement problems.
- Parameter of education: years of schooling, teacher-pupil ratio and enrolment rates; don’t reflect quality of education.
- Health services measured in: Monetary terms, life expectancy, mortality rates; don’t reflect the true health status.
- human capital growth > growth of per capita real income
- human capital and economic growth flows in either directions.
- higher income causes building of high level of human capital and vice versa.
7th Plan: HR Development.
- difficult to establish a relation of cause and effect from the growth of human capital (education and health) to economic growth But these sectors grows simultaneously.
- Growth in each sector probably has reinforced the growth of every other sector.
- National Education Policy 2019: India aspires to take its place beside the United States and China as the third largest economy by 2030-2032.
- It suggests: how human capital formation in India will move its economy.
- 6th largest economy; 3.05 T presently; target: five trillion economy till 2024-25 & till 2030-2032; 10 T, 3rd largest by knowledge resources not Natural R.