Education, Human Capital Investment, the most important factor for economy

Wisey By Wisey, 28th Apr 2010 | Follow this author | RSS Feed | Short URL
Posted in Wikinut>Writing>Essays

Physical capital have been used to invest in the human capital of the nations. Investment in human capital is playing the most important part for the productivity for the investment in physical capital. The excessive population growth in the developing countries must be also concerned with the quality of their human resources for the long-run economic success.

Introduction of Eduction and Economy

Education, investment in human capital, is at least as necessary as investment in physical capital for a country's long-run economic success. In addition to excessive population growth, developing countries must be also concerned with the quality of their human resources. Priorities should be given to health-care and education, improved health and nutrition will make people happier and more productive; while educated people become more productive workers, they can use capital more effectively adopt new technologies, and learn new management techniques.

Scarce Human Resources in Developing Countries

In less developed countries, where human capital is scarce, the gap between the wages of educated and uneducated workers is even larger. Moreover, a country with human resources increasing rapidly tends to develop more rapidly as well. Glancing to the fact of Japan’s economy, we will discover that Japan moved into its position today as the world’s second-largest industrial economy, even though Japan joined the industrial race late and only at the end of 19th century sent their students abroad to learn western technology. Thus, human capital is the single most important catalyst to the economic development. For this reason, Taiwan, Hong Kong and South Korea, new industrial countries, simulated the models of Japan and the USA.

Children's Education in less Developed Countries

Anyway, in less developed countries, children often drop out of school at an early age, even though the benefit of additional schooling is very high, simply because their labor is needed to help support the family. In addition, young females receive considerably less education than young males in virtually every developing country. Women’s enrollment in primary and secondary education is lower than that of men every year. This problem often stems from the inequality of gender gap, namely the discrimination, the men-valued custom, etc. Yet, the female education is profoundly important to convey a country’s prosperous and brilliant future.

Braindrain, a Depletion of the Human Capital Stock

Another problem facing some poor countries is the brain drain, the emigration of many of the most highly educated workers to rich countries, where these workers can enjoy a higher standard of living. It would seem natural for poor countries to send their best students abroad to earn higher degrees; otherwise, those students who have spent time abroad may choose not to return home and this brain drain will reduce the poor nation's stock of human capital even further.


At the outset, there are always trade-offs between the economy and education. On the other hand, the brain drain-facing policy may meet the dilemma if there are no specific measurements to crack down on this risk, such as setting home-returning arrangements for abroad-studying students, practicing annually appraisal system for outstanding people, etc. Yet, the most important factor is that the government should take the welfare to heart by providing and riding on good education and health-care.


Braindrain, Economy, Education, Human Capital, Trade-Off

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author avatar Wisey
Graduate in 2004 in Management, and in 2006 in Finance, Wisey is pursuing his dream of entrepreneur where reading, listening, improvement, sharing, enjoying and practice are key to his life success...

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