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    Human Capital Theory

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    Aive Marist Obsioma
    The document discusses human capital theory and indexes like the World Bank's Human Capital Index and the UN's Human Development Index. It provides a brief history of human capital theory dating back to Adam Smith and outlines some of the main concepts, like how human capital allows economies to grow through education and skills training. It also summarizes some of the key metrics and rankings of the Philippines in these indexes, such as its 107th place ranking in the Human Development Index. Finally, it acknowledges some limitations of purely economic views of human capital theory that do not consider other societal factors.

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    Human Capital Theory

    Uploaded by

    Aive Marist Obsioma
    49 views19 pages
    The document discusses human capital theory and indexes like the World Bank's Human Capital Index and the UN's Human Development Index. It provides a brief history of human capital theory dating back to Adam Smith and outlines some of the main concepts, like how human capital allows economies to grow through education and skills training. It also summarizes some of the key metrics and rankings of the Philippines in these indexes, such as its 107th place ranking in the Human Development Index. Finally, it acknowledges some limitations of purely economic views of human capital theory that do not consider other societal factors.

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    The document discusses human capital theory and indexes like the World Bank's Human Capital Index and the UN's Human Development Index. It provides a brief history of human capital theory dating back to Adam Smith and outlines some of the main concepts, like how human capital allows economies to grow through education and skills training. It also summarizes some of the key metrics and rankings of the Philippines in these indexes, such as its 107th place ranking in the Human Development Index. Finally, it acknowledges some limitations of purely economic views of human capital theory that do not consider other societal factors.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    49 views19 pages

    Human Capital Theory

    Uploaded by

    Aive Marist Obsioma
    The document discusses human capital theory and indexes like the World Bank's Human Capital Index and the UN's Human Development Index. It provides a brief history of human capital theory dating back to Adam Smith and outlines some of the main concepts, like how human capital allows economies to grow through education and skills training. It also summarizes some of the key metrics and rankings of the Philippines in these indexes, such as its 107th place ranking in the Human Development Index. Finally, it acknowledges some limitations of purely economic views of human capital theory that do not consider other societal factors.

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    © All Rights Reserved
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    of 19

    "Human Capital Theory (World Bank’s Human Capital Index and the

    Human Development Index)"


    EDFD 208 EDUCATION AND NATIONAL DEVELOPMENT
    *DISCUSSIONS
    1. What Is Human
    Capital?
    2. History of Human Capital
    *Adam Smith 18 century
    th

    *Gary Becker and Theodore Schultz


    3. Criticism of Human Capital
    Theories.
    4. What is the relationship between
    human capital and the economy?
    5. What is human capital risk?
    6. World Bank’s Human Capital Index
    and Human Development Index
    *DISCUSSIONS
    7. How the world view this Theory
    8. Advantages and Limitations of the
    theory and Example
    The human capital theory
    posits that human beings can
    increase their productive
    capacity through greater
    education and skills training.
    Critics of the theory argue
    that it is flawed, overly
    simplistic, and confounds
    labor with capital.
    History of Human Capital
    1. Adam Smith
    referred to the
    concept in his
    book "An Inquiry
    into the Nature
    and Causes of the
    Wealth of
    Nations,"
    THEODORE SCHULTZ GARY BECKER

    believed human capital was like any other


    form of capital to improve the quality and
    level of production. This would require an
    investment in the education, training, and
    enhanced benefits of an organization's
    employees
    Criticism of Human
    Capital Theories.
    Human capital theory rests on the
    assumption that formal education is
    highly is highly instrumental and
    necessary to improve the productive
    capacity of a population. In short,
    human capital theorists argue that an
    educated population is a productive
    population
    What is the relationship
    between human capital and
    the economy?
    Human capital allows an economy to
    grow. When human capital increases in
    areas such as science, education, and
    management, it leads to increases in
    innovation, social well-being, equality,
    increased productivity, improved rates of
    participation, all of which contribute to
    economic growth. Increases in economic
    growth tend to improve the quality of life
    for a population.
    WHAT IS HUMAN CAPITAL RISK?

    Human capital risk refers to the gap


    between the human capital
    requirements of a company or
    organization and the existing
    human capital of its workforce. This
    gap can lead a company towards
    inefficiencies, inability to achieve its
    goals, a poor reputation, fraud,
    financial loss, and eventual closure.
    To reduce and eliminate human
    capital risk, an organization should
    train, foster, and support its
    workforce.
    World Bank’s Human Capital Index and Human Development Index

    The Human Capital Index is a report prepared by


    the World Bank. The Index measures which
    countries are best in mobilizing the economic and
    professional potential of its citizens. The index
    measures how much capital each country loses
    through lack of education and health.
    World Bank’s Human Capital Index and Human Development Index

    The Philippines human development index score


    placed it tied at 107th, up four places from a year
    earlier but still in the bottom half of the 189
    countries studied, according to a report by the
    United Nations Development Program (UN).
    Beatrice M. Laforga
    World Bank’s Human Capital Index and Human Development Index

    The Philippines had a Human Development Index


    (HDI) score of 0.718, the UNDP said in its Human
    Development Report 2020, which carries the title
    “The Next Frontier: Human Development and the
    Anthropocene.”
    World Bank’s Human Capital Index and Human Development Index

    THE HDI MEASURES THREE KEY DIMENSIONS

    MEAN YEARS OF LIFE EXPECTANCY- EXPECTED YEARS


    SCHOOLING- 9.4 71 YEARS OLD OF SCHOOLING- 13.1
    How world view this
    Theory?
    The Human Capital Index (HCI) quantifies
    the contribution of health and
    education to the productivity of the
    next generation of workers. Countries
    are using it to assess how much income
    they forego because of human capital
    gaps, and how much faster they can turn
    these losses into gains if they act now.
    The index measures how much capital
    each country loses through lack of
    education and health
    Advantages and Example of the Theory
    Advantages Examples
    *Economic Growth *Abilities
    *Employee Morale *Creativity
    *Higher Income Levels *Education
    *Higher rates of Civic Participation and *Experience
    Reduced Crime *Judgment
    Limitation of the Theory
    The theory is not comprehensive. Yes, higher education can lead to higher levels
    of income but is not the only variable in the equation.
    Human Capital Theory includes factors such as health, skills, and experience.
    Yet it doesn’t consider other factors such as the role of status, network, or
    societal infrastructure. For instance, there are those who do not fit well into an
    academic environment. They may be the next Michael Jordan or Lionel Messi,
    yet are confined by the public schooling system. Providing an academic
    education to those who are not lute to such only prevents their true potential
    from flourishing.
    World Bank’s Human Capital Index and Human Development Index

    Before we end the discussion, please answer this.

    What is the effect of Human Capital/Development


    Index to a country?
    Personal
    Reflection of the
    Group
    https://www.open.uwi.edu/sites/default/files/bnccde/belize/conference/papers2010/almendarez.html
    https://www.google.com/search?q=human+capital+theory&oq=Human+Capital+Theory&aqs=chrome.0.0i5
    12l10.323j0j7&sourceid=chrome&ie=UTF-8

    https://www.investopedia.com/terms/h/humancapital.asp
    https://www.open.uwi.edu/sites/default/files/bnccde/belize/conference/papers2010/almendarez.html
    https://hdr.undp.org/sites/default/files/Country-Profiles/PHL.pdf
    https://boycewire.com/human-capital-definition/

    ARTICLE
    Human Development Report 2020 The Next Frontier: Human Development and the Anthropocene Briefing
    note for countries on the 2020 Human Development Report

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