Human Capital, Education and Training

Abstract

Human capital refers to the stock of acquired skills, knowledge and abilities of human beings. Underlying this concept is the idea that such skills and knowledge enhance productivity and, moreover, they do so by enough to justify the expenditure undertaken to acquire them. Thus, spending to increase the stock of human capital should be viewed as ‘investment’, not as ‘consumption’. The return to investment in human capital is the increased amount of output that results from an expansion (and deepening) of skills and knowledge.