Consider the following statements:
Human capital formation as a concept is better explained in terms of a process which enables
- individuals of a country to accumulate more capital.
- increasing the knowledge, skill levels and capacities of the people of the country.
- accumulation of tangible wealth.
- accumulation of intangible wealth.
Which of the statements given above is/are correct ?
1 and 2
2 only
2 and 4
1, 3 and 4
Answer is Right!
Answer is Wrong!
This question was previously asked in
UPSC IAS – 2018
Statement 1 is incorrect: Accumulating *more capital* generally refers to physical or financial capital, not human capital.
Statement 2 is correct: Increasing the knowledge, skill levels, and capacities of people directly describes the process of human capital formation (e.g., through education, training, healthcare).
Statement 3 is incorrect: Human capital is considered an *intangible* form of wealth, not tangible.
Statement 4 is correct: Human capital formation involves the accumulation of intangible wealth in the form of knowledge, skills, health, etc.
Therefore, statements 2 and 4 correctly explain human capital formation.