ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Investments in human capital encourage employees to work together and identify improvements that will directly benefit them. Those investments often prompt the opening of communication lines between departments and management levels, allowing human capital to flow more freely within the organization.

Detailed explanation-2: -Investment in education and on-the-job training helps to impart these skills and enhance the knowledge base and thus helps in the absorption of new technologies which leads to higher production and thus economic growth. Thus it is evident that human capital contributes to economic growth in various ways.

Detailed explanation-3: -Population becomes human capital when there is investment made in the form of education, training and medical care. In fact, human capital is the stock of skill and productive knowledge embodied in them.

Detailed explanation-4: -The theory states that education increases people’s general mental capabilities and technical skills, thereby increasing their pro-ductive potential in the labor force. It follows that schooling is an investment and that people are an important repository of capital and not just a source of raw labor.