---

Guest post by: African Development Bank Become an Author

Tweet

---

---

Human capital is a broad concept which identifies human characteristics which can be acquired
and which increase income. It is commonly taken to include peoples’ knowledge and skills, acquired
partly through education, but can also include their strength and vitality, which are dependent on
their health and nutrition. Human capital theory focuses on health and education as inputs to
economic production. This is in contrast to the concept of human development which views
health and education as intrinsically valuable outcomes to be placed alongside economic production
as measures of human welfare. In understanding the role of human capital as an input into
development it is necessary to consider the possible links between human capital, other forms of capital,
income and growth. While it is true for every country, for which there is data, that more educated
people earn more than less educated ones it does not follow that there is a simple relationship between
investing in people and countries becoming richer. Human and certain forms of physical capital may be
complementary. The problem in investing is to match skills with machines. It is not a question of either
investing in people or investing in machines, both are necessary. Even more important is the issue of
how much to invest in alternative forms of capital equipment and skilled labour. The answer to that
question is unlikely to be the same for all countries or to remain unchanged over time.

Human Capital and Economic Development
Simon Appleton and Francis Teal

Related Articles

  Introduction: Human Capital and Economic Development
  Expenditure Composition and Growth
  Conclusion: Human Capital and Economic Development
  The role of human and physical capital in growth: The Effects of Human Capital on Economic Development
  Effects of education upon child schooling and cognitive development: The Indirect Effects of Investment in Human Capital
  Preface: HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES
  Is Capitalism, as Seen by Enterpreneuers now, Good or Bad?
  HUMAN RESOURCE DEVELOPMENT AND ATTRACTING INWARD FDI
  Questions Posed: HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES
  5.2 Economic growth and diversification: Economic Report on Africa 2007
  Summary: HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES
  Effects of health on child schooling and cognitive development: The Indirect Effects of Investment in Human Capital
  Your Personal and Professional Assets
  Investing Priorities – 4 Types of Capital
  Rates of Return: The Effects of Human Capital on Economic Development
  Determinants of Growth in Sub-Saharan Africa
  Knowledge And The Intellectural Capital Of The Organization
  5.2 Diversification-deepening policies raise growth and TFP: Economic Report on Africa 2007
  The concept of development: Africa’s human development
  Introduction: Fiscal Dimensions of Sustainable Development

Related Forum Posts

HRPreneur
New Small Business Topic
Del Castienne - International Business and Project Brokers
How to valuate a business
Re: Make Friends...Literally BUILD them!

Share this article. Fund someone's dream.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Do You Over Promise and Under Deliver

Extreme Self-care - Make Time For Yourself.

Keep the Business Mind Busy

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.