Thursday, November 13, 2008

JOURNAL ON HUMAN CAPITAL

SOUTHERN NEW HAMPSHIRE UNIVERSITY.
SCHOOL OF COMMUNITY ECONOMIC DEVELOPMENT.
ICD 533. PRINCIPLES AND PRACTICES FOR DEVELOPMENT.
JOURNAL ON HUMAN CAPITAL
CENTRE: ARUSHA.
INSTRUCTORS: MICHEL ADJIBODOU
DR.SINDA HUSSEIN SINDA
STUDENTS NAME: JOSEPH CLEMENCE.
ADDRESS.

Email: klemensjk@yahoo.com
Phone: 0713045264.
Box. 154 Mombo.
TABLE OF CONTENTS.
1.0 INTRODUCTION 3
2.0 What is human capital? 3
3.0 Types of human capital 4
4.0 Activities that increase Human Capital. 4
5.0. Importance of Human capital in Community Economic Development. 6
6.0. Conclusion. 6
REFERENCE. 7

1.0 INTRODUCTION
Human capital is core factor among the factors of production. The community with smart human capital is likely to develop faster than the one which lacks. This Journal discusses what human capital is, how human capital can be increased, and contribution of human capital to community economic development. It collects views from different authors and my own views.
2.0 What is human capital?

In Wikipedia free encyclopedia, Human capital is defined as the stock of productive skills and technical knowledge embodied in labor. Adam Smith as quoted in Wikipedia further defined human capital as the acquired and useful abilities of all the inhabitants or members of the society. According to Adam Smith, the acquisition of such talents, by the maintenance of the acquirer during his education, study, or apprenticeship, always costs a real expense, which is a capital fixed and realized, as it were, in his person and that the talents, as they make a part of his fortune, so do they likewise that of the society to which he belongs. He further said that, the improved dexterity of a workman may be considered in the same light as a machine or instrument of trade which facilitates and abridges labour, and which, though it costs a certain expense, repays that expense with a profit. Adam Smith generally sees the human capital as skills, dexterity (physical, intellectual, psychological, etc) and judgment.
Many early economic theories refer to human capital simply as labor, one of three factors of production, and consider it to be a fungible resource which is homogeneous and easily interchangeable.
In Becker's book entitled Human Capital, published in 1964, human capital is considered similar to "physical means of production", e.g., factories and machines. According to him one can invest in human capital (via education, training, medical treatment) and one's outputs depend partly on the rate of return on the human capital one owns and thus, human capital is a means of production, into which additional investment yields additional output. He further argued that Human capital is substitutable, but not transferable like land, labor, or fixed capital.
Marxists see human capital as a commodity to be sold. According Karl Marx, under capitalism workers had to sell their labor power in order to receive income (wages and salaries).
3.0 Types of human capital
Human capital can be categorized as skilled labours which are the people imparted with skills and technical know how. Normally these are the people who are educated and acquired skills in different professions. Unskilled labors are another category which includes people with no skills and technical know how but endowed with tacit knowledge. Semi skilled labours category involves those people who have had vocational training.
4.0 Activities that increase Human Capital.
Human capital can be increased by education and training which includes formal education where people are trained in schools colleges and universities, workshops and seminars. Informal education which involves acquiring of skills through experience sharing and observation. Health care through provision of sufficient health services and proper nutrition. These will increase human capital. Job search makes people use their skills effectively in production for the development of the community. Migration also increases human capital to the places or country of destination. (commerce@uow.edu.au).
Migration can also decrease human capital to the migrant’s place/country of origin. For instance in Tanzania most people who have acquired skills in various professions migrate from villages to towns. The villages are left with unskilled man power. When workers migrate, their early care and education generally benefit the country/place where they move to work. And, when they have health problems or retire, their care and retirement pension will typically be paid in the new country.
Some researchers argued that the contribution of educational investment to productivity growth is negative. The accumulation of such negative results in literatures has fueled a growing skepticism on the role of schooling in the growth process. In reaction to that Angel et. al ( 2000) argued that education increased productivity and that the weak data was likely to be one of the main reasons for the discouraging results obtained in recent researches on human capital and growth. However it is true that something more is needed in addition to educational capability. This as I think is commitment in work, seriousness, accountability and willing to apply skills and techniques professionally in production by the trainees. It is true that some trainees do not deliver to the expectations because of lack of accountability, laziness, reluctance, dullness and in fewer cases lack of working facilities or poor working environment.
5.0. Importance of Human capital in Community Economic Development.
Human capital is important in economic production as it is powerful instrument in production. Human capital makes possible for improvement of the environment to bring about standard social economic life. It is a tool for innovation, institutional building and exploration. Human capital brings about sound community economic development if the opportunities and resources within community reach are efficiently utilized.
6.0. Conclusion.
Human capital is the core factor among the other factors of production. It is effective use of human capital that makes other factors and available resources to be of use and brings the growth of community economic development growth. The human capital may not be effective enough in production due to lack of skills and techniques. The skills and techniques however can be imparted to human capital through training and sharing experience and lessons learnt. For good delivery to the development however people have to be accountable, innovative, set visions and missions for development.

REFERENCE.

1. Angel de Fuente and Rafael Domenech. Human Capital in Growth Regression: How much differences does data quality make?. 2000.

2. Wikipedia encyclopedia.

3. What is Human Capital and Social capital?. Article University of Wollongong Australia; 2007. (commerce @uow.edu.au)

No comments: