The Relationship Between Human Capital and Economic Growth

Description

In the contemporary world, human capital is undoubtedly considered one of the main factors affecting the sustainable economic development of each country. The rapid development of human capital has particular importance for countries like, which aims to form a competitive structure for its economy to meet requirements of today’s global competition and bring the welfare of society to high standards of living.
Human capital consists of those characteristics of individuals that remain constant in any social environment and can be exploited on the labor market in exchange for economic resources of any kind. In practice, human capital is made up of educational capital and biological capital. Human capital has evolved as an economic concept, where it is defined as “an estimate of a person’s ability to produce labor income”.
Human capital is essential for economic growth and poverty reduction. Human capital accumulation improves labor productivity, facilitates technological innovation, increases returns on capital, and makes growth more sustainable, all of which contribute to poverty reduction.