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Several earlier chapters have mentioned the important role of human capital in economic growth and development. We now focus more directly on Investment in Human Capital, including any and all investments in improving human capabilities. Chief among these are:

  • Primary Education, Secondary Education, University Education and Research,
  • Business Training and Research Programs, including “on-the-job” training,
  • Vocational Education, and
  • Learning by Doing.

Without doubt, the first category of human capital investment is the most consequential. We will devote most attention to it.

But the role of the other categories should not be ignored. The category “learning by doing” is interesting in and of itself. In Nobel Laureate Kenneth Arrow’s study of airframe manufacturing in World War II, increased amounts of labor and capital did not fully explain the tremendous productivity of U.S. aircraft plants: the U.S. made more B-24 bombers than all the aircraft produced by Japan. Why?

The effects of learning by doing.

Aristotle defined “learning by doing” 2000 years ago.

To quote:

"For the things we have to learn before we can do them we learn by doing them."

At this point, it is helpful to note that throughout this Chapter, numerous examples of human capital investment and its implications are given. One of the sources cited most often is a long series of studies from the National Bureau of Economic Research (NBER), a nationwide network of economic researchers with headquarters in Cambridge, Massachusetts. The NBER traces its origins back to the late 1920s.

Human capital: theory and applications

Economic thinks from David Ricardo and Karl Marx and J.M. Keynes viewed capital merely as physical assets owned by capitalistic firms. This view prevailed in economics until well into the 1950s. Then, the work of, first, Theodore Schultz and then the 1964 publication of the book Human Capital by Gary Becker

For a good retrospective on Gary Becker, see “Gary Becker (1930-2014)”, Science, June 13, 2014, 344(6189):1233.

changed forever how economists and policymakers view capital. Both were Nobel Laureates in Economics; both spent most of their careers at the University of Chicago.

This revolution in economic thinking began with an article by the father of the Human Capital Concept: Theodore Schultz of Chicago. His 1961 contribution “Investment in Human Capital” was a true landmark in the Annals in Economics. He asserted that the definition of capital need to be further expanded to include forms of human improvement. To quote:

"Although it is obvious that people acquire useful skills and knowledge, it is not obvious that these skills and knowledge are a form of capital, that this capital is in substantial part a product of deliberate investment, that it has grown in Western societies at a much faster rate than conventional (nonhuman) capital, and that its growth may well be the most distinctive feature of the economic system."

Schultz was led to think of the idea of Human Capital from his experiences in post-war Germany (1946-48) where he examined the effects of allied carpet-bombing of Nazi-Germany.

c.f. Kurt Vonnegut’s novel, Slaughterhouse Five, which depicts in striking terms the effects of Allied bombing on the City of Dresden in Germany.

The Allies had believed that carpet-bombing of Dresden, Frankfurt and other German cities would bring the German war machine to its knees quickly. But that did not happen. Large land forces from the U.S. and U.S.S.R. were needed in 1944-45 to defeat the Nazi.

Questions & Answers

where we get a research paper on Nano chemistry....?
Maira Reply
nanopartical of organic/inorganic / physical chemistry , pdf / thesis / review
Ali
what are the products of Nano chemistry?
Maira Reply
There are lots of products of nano chemistry... Like nano coatings.....carbon fiber.. And lots of others..
learn
Even nanotechnology is pretty much all about chemistry... Its the chemistry on quantum or atomic level
learn
Google
da
no nanotechnology is also a part of physics and maths it requires angle formulas and some pressure regarding concepts
Bhagvanji
hey
Giriraj
Preparation and Applications of Nanomaterial for Drug Delivery
Hafiz Reply
revolt
da
Application of nanotechnology in medicine
what is variations in raman spectra for nanomaterials
Jyoti Reply
I only see partial conversation and what's the question here!
Crow Reply
what about nanotechnology for water purification
RAW Reply
please someone correct me if I'm wrong but I think one can use nanoparticles, specially silver nanoparticles for water treatment.
Damian
yes that's correct
Professor
I think
Professor
Nasa has use it in the 60's, copper as water purification in the moon travel.
Alexandre
nanocopper obvius
Alexandre
what is the stm
Brian Reply
is there industrial application of fullrenes. What is the method to prepare fullrene on large scale.?
Rafiq
industrial application...? mmm I think on the medical side as drug carrier, but you should go deeper on your research, I may be wrong
Damian
How we are making nano material?
LITNING Reply
what is a peer
LITNING Reply
What is meant by 'nano scale'?
LITNING Reply
What is STMs full form?
LITNING
scanning tunneling microscope
Sahil
how nano science is used for hydrophobicity
Santosh
Do u think that Graphene and Fullrene fiber can be used to make Air Plane body structure the lightest and strongest. Rafiq
Rafiq
what is differents between GO and RGO?
Mahi
what is simplest way to understand the applications of nano robots used to detect the cancer affected cell of human body.? How this robot is carried to required site of body cell.? what will be the carrier material and how can be detected that correct delivery of drug is done Rafiq
Rafiq
if virus is killing to make ARTIFICIAL DNA OF GRAPHENE FOR KILLED THE VIRUS .THIS IS OUR ASSUMPTION
Anam
analytical skills graphene is prepared to kill any type viruses .
Anam
Any one who tell me about Preparation and application of Nanomaterial for drug Delivery
Hafiz
what is Nano technology ?
Bob Reply
write examples of Nano molecule?
Bob
The nanotechnology is as new science, to scale nanometric
brayan
nanotechnology is the study, desing, synthesis, manipulation and application of materials and functional systems through control of matter at nanoscale
Damian
Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
Renato
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
?
Kyle
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
Adin
why?
Adin
what school?
Kyle
biomolecules are e building blocks of every organics and inorganic materials.
Joe
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
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Source:  OpenStax, Economic development for the 21st century. OpenStax CNX. Jun 05, 2015 Download for free at http://legacy.cnx.org/content/col11747/1.12
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