Here is a compilation of essays on ‘Human Capital’ for class 9, 10, 11 and 12. Find paragraphs, long and short essays on ‘Human Capital’ especially written for school and college students.
Essay on Human Capital
Essay Contents:
- Essay on the Meaning of Human Capital
- Essay on the Concept of Human Capital
- Essay on the Characteristics of Human Capital
- Essay on the Importance of Human Capital
- Essay on the Conventional Measurement Method of Human Capital
Essay # 1. Meaning of Human Capital:
Human capital is the intersection of an organization’s skills, the required roles, and the people available and it can be explained as:
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1. Skills:
Skills includes hard skills, leadership, business skills and interpersonal skills.
2. Roles:
Roles pertains to jobs, project roles and positions within the organization.
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3. People:
People are the key; finding people with the right skills, competencies, experience and education to fill the necessary roles.
Human capital is referred to as knowledge, education and competencies of individuals as well as health Sharpe, 2001; Business and Information 2013 – G3 – UNESCAP, n.d., and the aggregation of investments in such areas as education, health, training, and migration to improve skills and competencies with realizing about tasks and goals, that enhance an individual’s productivity.
It is quite difficult to find studies or scholarly propositions stating directly that human capital holds a relationship with, or can lead to sustainability of organizations. However, Hatch and Dyer suggested the believed that having elements of human capital allows organization to learn faster than competitors, which can lead to sustainable advantage. Nevertheless, jumping to the conclusion that human capital is the way to sustainability might not be solid enough to communicate to the field.
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Essay # 2. Concept of Human Capital:
The concept of human capital is semantically the mixture of human and capital. In the economic perspective, the capital refers to ‘factors of production used to create goods or services that are not themselves significantly consumed in the production process’.
Along with the meaning of capital in the economic perspective, the human is the subject to take charge of all economic activities such as production, consumption, and transaction. On the establishment of these concepts, it can be recognized that human capital means one of production elements which can generate added-values through inputting it.
The basic concept of human capital can be variously categorized by each perspective of academic fields and to explain the main concept of human capital three view-points can be mentioned as:
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1. The first viewpoint is based on the individual aspects. Schultz (1961) recognized the human capital as ‘something akin to property’ against the concept of labor force in the classical perspective, and conceptualized ‘the productive capacity of human beings in now vastly larger than all other forms of wealth taken together’.
2. There is the second viewpoint on human capital itself and the accumulation process of it. This perspective stresses on knowledge and skills obtained throughout educational activities such as compulsory education, postsecondary education, and vocational education.
3. The third is closely linked to the production-oriented perspective of human capital. Romer (1990) refers to the human capital as ‘a fundamental source of economic productivity’. Rosen (1999) states the human capital as ‘an investment that people make in themselves to increase their productivity’.
More recently, Frank & Bemanke (2007) define that human capital is ‘an amalgam of factors such as education, experience, training, intelligence, energy, work habits, trustworthiness, and initiative that affect the value of a worker’s marginal product’.
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Essay # 3. Characteristics of Human Capital:
Characteristics of human capital can be mentioned as:
1. Expandable and Self-Generating Characteristics:
To begin with, the expandable and self-generating characteristics of human capital are closely linked to the possibility that the stock of knowledge increases individuals’ human capital. Furthermore, the increase of human capital can be expanded by either endogenous or exogenous factors.
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It is possible that original knowledge can be continuously elaborated and developed through the relationship between external knowledge, information, skills, experiences, and other knowledge- based factors as well.
In the economic perspective, the characteristic of human capital focusing on knowledge can be a core element to solve ‘problem of scarcity’ which little materials is equivalently distributed to economic agents. Throughout expanding and self- generating the human capital, it is sufficiently possible that the portion of that capital as an economic agent is extended.
2. Transportable and Shareable Characteristic:
The transportable and shareable characteristics of human capital mean that the original holder of knowledge can distribute his/her knowledge to others. On the circumstance that the original knowledge- holder’s exclusive ownership is slightly acceptable, the equivalent distribution between the holders and the takers can be actualized. Consequently, the former two characteristics extend the ‘volume’ of human capital, and the latter two expand the ‘range’ of human capital.
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Essay # 4. Importance of Human Capital:
Importance of human capital can be explained as:
1. It is important because it is closely linked to core competences and competitiveness of organization.
2. It directly affects the productivity of the organization.
3. It is required for the purpose of maximizing organizational profits.
4. Human capital is important because it can increase social consciousness of constituents within community.
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5. It is important because higher performance of employees directly leads to customer satisfaction, productivity, profit, employee turnover and safety at work.
6. It helps in building organization’s image in the market.
7. It is important because it is the most important pillar of an organization. An organization is nothing without employees.
8. Human capital is the backbone of Human Development and economic development in every nation.
9. Better use of capital goods- modern technology is becoming more and more complex. With the growth of science, machinery and equipment are becoming more sophisticated. Their efficient operation requires skill and technical knowledge. Therefore skilled human capital is very significant.
10. Better use of improved knowledge- knowledge about production and management of economies is expanding at a very fast rate and to move with that pace human capital helps a country a lot
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11. It is important for the overall performance of an organization because if not taken care properly then the individual human capital can affect organizational human capital such as ‘collective competences, organizational routines, company culture and relational capital as well and that would cause a bad impact on the overall performance.
Essay # 5. Conventional Measurement Method of Human Capital:
The conventional standard to measure human capital stock has been largely categorized into various parts such as, Cost-, and Income-based approach etc.
They can be described as:
1. Cost-Based Approach:
Cost-based approach is based on measuring the stock of human capital through summing costs invested for one’s human capital. For the purpose of calculating the invested costs, Kendric (1976) utilized an individual’s investment costs considering depreciation, and Jorgenson & Fraumeni (1989) presented discounted income in the future. Considering that this approach is based on indirectly measuring stock of human capital, it is difficult to precisely classify boundary between investment and consumption in the perspective of costs for the human capital.
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2. Income-Based Approach:
This approach is based on the returns which an individual obtains from a labor market throughout education investment. Mulligan & Sala-i-Martin (1995) defines that aggregate human capital is the sum of quality adjustment of each individual’s labor force, and presents the stock of human capital utilizing an individual’s income. Considering that ‘human-unrelated factors’ can more influence an individual’s income, this approach rarely presents a complete measurement for human capital.