1-What is human capital and why is it so crucial to expand human capital as part of the development process in developing countries? Give concrete example(s) of specific countries as part of your answer to substantiate.
The term, Human Capital, is understood as a measure of skills and knowledge of an employee. These skills and knowledge/information, of an employee, add value to product/service that industry produces. Also, human capital plays an important role in not only in the expansion of the economy, but also in improving the quality of the economy. In fact, economists suggest that human capital expedites the process of development and facilitates industries in producing unique and competitive products and services. Furthermore, human capital reduces the economic gap between developed and developing countries, which allow developing countries to compete against more mature industries of developed countries (Azarner 459).
It is imperative to recognize that investment in human capital not only brings changes (positive) to the economy, but also play an important role in bringing social changes to a country. Investment in human capital, in healthcare and education, has a socioeconomic impact. This impact is positive, quick and lasting; therefore, more developing countries are investing in human capital to bring changes especially qualitative) in various industries (Ronkin).
Different studies, about Human Capital, suggest that higher the investment in human capital, greater the performance of a firm/industry. It directly links investment in human capital with economic growth, which is a prime objective of any developed and developing the country. This information also facilitates us in understanding why it is crucial, for developing countries, to invest and expand on human capital; for instance, China, India, and the Caribbean (Sarkan 851).
2-Explain some of the reasons why developing countries have not realized a greater positive development impact from their higher education programs. In this context, why should the development of a solid elementary education system take precedence over an expansion of the university system in developing countries? Give a specific country example that you find in your readings for the relevant materials.
There are several factors, which explain why developing countries could not benefit from the investment in higher education and higher education-related programs. One of the primary reasons is the flight of human capital. In developing countries, there are fewer lucrative opportunities for highly developed human capital, which is why human capital flees from a host country and lands at such destination, where socioeconomic opportunities are more lucrative than the host country. This phenomenon is called brain drain, and it adversely affects the economy, as it not only slows down the overall economic progress in a developing country, but also an industry cannot evolve in desired pace when there is a serious deficiency of highly developed human resource (Ronkin). Appropriate examples of brain drain are India, China, Bangladesh, and Pakistan (Shah).
Another reason is the quality of higher education, which is considered inferior to the developing countries. Universities are not spending enough on Research, in developing countries, which is why the developed human capital is adequate to bring seismic changes in the socioeconomic realm (Hilten). In addition to the mediocre quality of higher education, poor elementary education is also responsible for producing unexceptional human capital. As the foundation is poor, quality education in the university cannot translate human resource into high-quality human capital.
3-Explain how a better-educated population will also tend to be a healthier, and vice versa, that a healthier population will tend to be better educated. In this context, how can an increase in human capital lead to an increase in GDP? Why might it not lead to an increase in GDP? Give a concrete example as part of your explanation to this question.
Education is directly correlated with awareness. The responsibility of educational institutions is to produce such individual, who can take better decisions, which have positive short and a long-term benefit for them and the society in which they dwell. Also, contemporary education also equips individuals/human resource with a particular set of skills and information, which allows them to play a positive role in industrial development. Therefore, we can say that quality education allows the population to take superior decisions, at the adequate time that directly and positively influence social-economic realm (Ronkin).
Also, because of the awareness, individuals become sensitive regarding their health, which affects their consumption patterns. Therefore, education affects not only the health of the economy, but also the health of individuals. Studies suggest that there is a positive correlation between health and GDP growth. It is because healthy individuals will be more efficient and thus their productivity will be high (Hilten).
The increase in human capital, which healthy/efficient, will lead to higher productivity. Human Capital, employed by firms, will be more efficient in working hours (will produce more during the same period), than the Human Capital, which is not healthy/efficient, for instance, if a healthy employee produces 16 units, whereas unhealthy employee will produce 12 units during the same period. Statistics reveal that developed countries have higher productivity than the developing countries and one of the factors (along with education) is a health (OECD iLibrary).
Work Cited
Azarner, Leonid V. “Free education, fertility and human capital accumulation.” Journal of Population Economics 23.2 (2010): 449-468.
Hilten, Lucy Goodchild van. “Higher education is key to economic development (but it’s not as simple as you think).” Elsevier. Elsevier, 27 July 2015. Web. 19 March 2018. https://www.elsevier.com/atlas/story/people/higher-education-is-key-to-economic-development.
OECD iLibrary. OECD “Factbook 2013: Economic, ENvironmental, and Social Statistics.” OEC ilibrary.Org. OEC ilibrary.Org, 31 December 2013. Web. 19 March 2018. http://www.oecd-ilibrary.org/sites/factbook-2013-en/02/02/01/index.html?contentType=%2Fns%2FStatisticalPublication%2C%2Fns%2FChapter&itemId=%2Fcontent%2Fchapter%2Ffactbook-2013-14-en&mimeType=text%2Fhtml&containerItemId=%2Fcontent%2Fserial%2F18147364&acce.
Ronkin, Noa. “Could brain drain have benefits? A look at Asia.” Medium. Medium, 1 December 2017. Web. 19 March 2018. https://medium.com/freeman-spogli-institute-for-international-studies/could-brain-drain-have-benefits-a-look-at-asia-fea65ee84840.
Sarkan, Cinar. “Human Capabilities and Economic Growth: A Comparative Human Capability Index.” International Journal of Economics and Financial Issues 5.4 (2015): 843-853.
Shah, Anup. “Brain Drain of Workers from Poor to Rich Countries.” Global Issues. Global Issues, 14 April 2016. Web. 19 March 2018. http://www.globalissues.org/article/599/brain-drain-of-workers-from-poor-to-rich-countries.
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