Differentiate between human capital and physical capital. What are the sources of human capital formation?
Human capital refers to the skills, training, experience, education, knowledge, know-how, and competencies contributed by humans. Physical capital refers to assets which themselves have been manufactured and are used for production of other goods and services such as cash, buildings, and machinery.
Sources of human capital formation are:
- Increasing expenditure in education at primary, secondary and higher level
- Providing health facilities which increase the life expectancy of the people
- Arranging on the job training
- Provision of education at primary, secondary and higher level
- Allowing migration to individuals for changes of jobs
- Organizing vocational training programmes students and working class.