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Human Capital

Definition

Human capital refers to the knowledge, skills, and abilities that individuals possess and contribute to economic productivity and development. It encompasses education, training, health, and other factors that enhance a person's ability to participate in the workforce.

Analogy

Think of human capital as the "toolbox" that individuals bring with them when entering the workforce. Just like a toolbox contains various tools needed for different tasks, human capital represents the set of skills and knowledge that people have acquired throughout their lives which enables them to contribute effectively to their economy.

Related terms

Education: The process of acquiring knowledge, skills, values, or attitudes through various instructional methods.

Literacy Rate: The percentage of people in a region who can read and write at a specified age group or above.

Skill Development: The process of enhancing one's abilities through practice and learning specific techniques related to a particular task or area.