Human Capital Formation in India — Flashcards

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Human capital refers to the stock of skills, abilities, expertise, knowledge, and education of a nation at a point of time. It is built through investment in people, especially through education and h…

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The process of addition to the stock of human capital over a period of time is called human capital formation. It happens when people gain more education, training, health, and useful knowledge.

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Human capital improves productivity. Skilled, educated, and healthy people can use machines better, work more efficiently, adapt to new technology, and contribute more to national income.

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Human capital treats human beings as a means to increase productivity. Human development treats human beings as an end in themselves, meaning education and health are valued for human welfare even if …

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Physical capital refers to assets that have been produced and are used for the production of other goods and services. Machines, buildings, and tools are examples of physical capital.

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Human capital is intangible and inseparable from its owner, while physical capital is tangible and separable from its owner. Human capital is restricted in mobility, while physical capital is perfectl…

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Human capital is built in the body and mind of the owner, so it cannot be separated and sold directly. Only the services of human capital are sold in the market, unlike physical capital which can be s…

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Physical capital depreciates due to use and changes in technology. Human capital also depreciates with ageing, but it can be improved through continuous investment in education and health.