Importance of Human Capital in Economicdevelopment

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1. Introduction:
The modern economists are of the view that natural resources i...e forest minerals, climate, water power etc. play in important role in the economic development of an country. A country which has abundant natural resources is in position to development more rapidly than a country which is deficient in such resources. They here how ere emphasize that the presence of abundant resources is not a sufficient condition of economic growth. Physical factures they say are passive factors of economic growth. They are to be combined with human resources of a country who are active facture of economic development. Human resources of a country are the size of population rate of growth of population urban rural distribution of people and quality of population. The quality of population as measured by health standards educational levels and technology is vitally important in influencing a nation's cultural and economic progress. A country which has developed the skills and knowledge of its people can exploit natural resources, build social economic and political organizations and can carry forward national development. The less developed countries of the world are now making investment in human persons for increasing their skills abilities ideals health on the job training programmers. These productive investments have a strong bearing upon increasing human capabilities which is called human capital. 2. What is human capital? Its Role in Economic Development? Human capital can be described as the skills training and health acquired through on the job training and education Michael Pakistan Park in defines it as: ''The skill and knowledge of human beings.''

It is also defined as:
“The endowment of abilities to produce that exists in each human being. It can be increased through formal education, on the job training and improved health and psychological well being. To be more precise. If the people of a country are well educated, well nourished, skilled and healthy, they are said to have more human capital.” 3. Human capital formation:

Human capital formation as described by Professor Harrison as ''the process of acquiring and increasing the number of person who have the skills, education and experience which are critical for the economic and political development of a country.'' Human capital formation is the act of increasing the productive qualities of labor force by providing more education and by increasing skills, health and notarization level. According T.W. Schultz, there are five ways of developing human capital. (i) Provision of health facilities which affect the life expectancy, strength, vigor and vitality of the people. (ii) Provision of on the job training which enhances the skill of labor force. (iii) Arranging education at the primary, secondary and higher levels. (iv) Study and extension programmer for the adults.

(v) Provision of adequate migration facilities to families to adjust to changing job opportunities. 4. Importance of human capital:
Human capital is the fundamental source of economic growth. It is a source of both increased productivity and technological advance. In fact the major difference between the developed and developing countries is the rate of progress in human capital. The under developed countries need human capital to staff new and expanding government services to introduce new system of land use and new methods of agriculture, to develop new means of communication to carry forward industrialization and to build the education system. Prof. Galbraith is right in saying that ''we now get larger part of economic growth from investment in men and improvements brought about by improved men.''

5. Problems of human capital formation in LDC's:
The main problems of human capital formation in less developed countries (LDC's) including Pakistan in brief are as under. (i) Faster increase in...
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