Q.What is Human Capital?

Human capital refers to the productive value that education, skill, training and health add to a country's population, over and above its bare numbers.

Human capital is the economically productive value embodied in a population as a result of investment in education, health, training, migration and access to information. It differs from the raw idea of "human resource", which is simply a headcount of the working-age population, because human capital emphasises the quality — the skills and health — of that population rather than its size alone.

Major sources of human capital formation include: expenditure on education (schooling and higher education), expenditure on health (nutrition, sanitation, public health), on-the-job training and vocational skilling, migration in search of better employment, and expenditure on acquiring labour-market and health information. Because human capital is built up through deliberate spending with a future productive return, economics treats spending on education and health as investment, in the same sense as spending on machinery or buildings.

A common slip is to treat 'human capital' and 'human resource' as synonyms — they are not; human resource is a quantity concept (how many people), human capital is a quality concept (how skilled/healthy those people are).