Question

Human capital investment is an important driver of economic growth and development in the Solow model. Outline with an explanation four ways by which the government can influence human capital investment positively

Answer 1

The government can impact human capital formation in the following ways-

1. Health services & facilities, generally conceived to comprise all expenditure which impact the life expectancy, stamina/ strength, & vitality of the population;

2. Formally arranged education at the elementary level, secondary level & higher level;

3. Study programs for grownups which aren’t organised by corporations, including extension programs particularly in agriculture;

4. Migration of persons & families to adjust to changing employment prospects. Additionally, we have to include the import of technical aid, expertise & consultants.