CHAPTER 2 ECONOMICS PEOPLE AS A RESOURCES

INTRODUCTION TO HUMAN CAPITAL RESOURCE FORMATION

1. What can you see in the given picture?

2. The problems of population are often highlighted whereas the positive side of it is overlooked .

3. Population is an asset and not a liability .

4. ASSETS- When the large population of the country becomes educated, healthy and contribute to the productive powers of the country, they can be considered as asset to the nation. LIABILITY- When the large population of the country, needs to be provided with food, shelter, clothing, education, healthcare etc. and who do not contribute to the productive powers of the nation , are termed as liability to the nation.

5. People as Resources- People as a resource is a way of referring to a country’s working people in terms of their existing productive skills and abilities. It refers to the human capital with the required skills and abilities to contribute to the economy of the country. It is an effort to explain population as an asset for the economy rather than a liability.

6. HUMAN CAPITAL- Human capital is the stock of skill and productive knowledge embodied in them. HUMAN RESOURCE- Working population of a country and their productive abilities and skills are known as Human Resource. People who are a part of the workforce are called human resource. The human resource plays a significant role in contributing to the economy of the country. They are able to contribute to the creation of GROSS NATIONAL PRODUCT .

7. GNP(Gross National Product)- I t is an estimate of total value of all the final products and services turned out in a given period by the means of production owned by a country's residents.

8. POPULATION EDUCATION TRAINING MEDICAL CARE HUMAN CAPITAL

9. Note: Investment in human capital through education, training and medical care yields a return just like investment in physical capital. Human capital is superior to other resources like land and physical capital. Human resource can make use of land and capital Land and capital cannot be useful on its own.  

10. CONSEQUENCES OF HUMAN CAPITAL FORMATION yields a return higher incomes higher productivity Not only do the more educated and the healthier people gain through higher incomes, society also gains in other indirect ways because the advantages of a more educated or a healthier population spreads to those also who themselves were not directly educated or given health care.

11. EXAMPLES OF HUMAN CAPITAL FORMATION India’s Green Revolution is a dramatic example of how the input of greater knowledge in the form of improved production technologies can rapidly increase the productivity of scarce land resources. India’s IT revolution is a striking instance of how the importance of human capital has come to acquire a higher position than that of material, plant and machinery.

12. SUPERIORITY OF HUMAN CAPITAL Human capital is in one way superior to other resources like land and physical capital human resource can make the optimum use of land and capital. Land and capital cannot become useful on its own.