Human Capital
Definition
Human capital refers to the skills, knowledge, education, training, and experience possessed by individuals that contribute to their productivity and economic value. It includes both formal education (such as degrees) and informal learning (such as on-the-job training).
Analogy
Imagine human capital as a toolbox filled with various tools that individuals acquire throughout their lives. Just like how having more tools allows you to complete tasks more efficiently, having higher human capital enables individuals to be more productive in their jobs.
Related terms
Labor Force Participation Rate: The labor force participation rate measures the percentage of working-age population actively participating in either employment or seeking employment.
Education Attainment: Education attainment refers to the highest level of education completed by individuals, such as high school diploma, bachelor's degree, or advanced degrees.
Skill-Biased Technological Change: Skill-biased technological change refers to technological advancements that disproportionately benefit individuals with higher skills and education, leading to increased wage inequality.
"Human Capital" appears in:
Study guides (2)
Additional resources (1)
Practice Questions (3)
- What is human capital and its impact on productivity?
- What do technology, physical capital, human capital, and natural resources have in common in terms of economic growth?
- Which type of public policy can contribute to economic growth by improving human capital?
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