According to human capital concept what is the base of increase in labour productivity?

Question

Accepted Answer

The correct option is 1:

The human capital concept views people as assets and suggests that investments made in them will lead to increased productivity and higher future returns, much like investing in physical capital. The two foundational pillars of human capital formation are education and health. Education enhances skills, knowledge, and efficiency, directly enabling workers to perform complex tasks and adopt new technologies, thus boosting productivity. Similarly, health is a vital input; a healthier workforce is physically and mentally more capable, leads to fewer sick days, and has a longer productive life span. Therefore, education and health together form the comprehensive base for increasing labor productivity under the human capital framework.

The incorrect option is 2:

While training is undoubtedly a crucial component of increasing labor productivity, it is generally considered a *part* of education or human capital investment rather than the ultimate base. Education and health provide the necessary foundation upon which specific job training can be built. Training alone, without the fundamental literacy, numeracy (education), and fitness (health) provided by the base factors, would be less effective.

The incorrect option is 3:

Technological progress is a key driver of economic growth and can significantly increase labor productivity, but it is considered a form of physical capital or knowledge advancement, not human capital itself. Human capital refers to the abilities and skills *embodied* in the workers. Technological progress often requires, rather than creates, the human capital (education and training) necessary to utilize it effectively.

The incorrect option is 4:

Imported capital refers to physical capital goods, such as machinery or infrastructure, brought in from another country. This is a factor of physical capital, not human capital. While physical capital certainly interacts with and complements human capital to increase overall output, the question specifically asks for the base according to the *human capital concept*.