Factors that contribute to human capital formation are as follows :
(i) Education : Education not only raises the
standard and quality of living but also encour¬ages modern attitudes of people. Moreover, education increases the productive capacity and productivity of a nation’s workforce by honing their skills. Further, education increases the acceptability of the modern techniques and also facilitates a primitive economy to break the shackles of tradition and backwardness. An investment m educational sector has two¬fold benefits. It not only increases the income earning capacity but also reduces the skewed distribution of income, thereby forming an egalitarian society.
(ii) Health: There is a saying "The greatest wealth
is health."The wealth of the country can be increased with the efforts of healthy workforce. Investment in health sector increases, efficiency and productivity of a nation’s workforce. In contrast to an unhealthy person, a healthy person can work better with more efficiency and consequently, can contribute relatively more to the GDP of a country. Good health and medical facilities mot only increase the life expectancy but also improve quality and standard of living. Investing in health sector ensures the perennial quality and standard of living. V/z
(iii) On-the-job training : Training refers to the act of acquiring skills, knowledge and competency required to perform a particular job efficiently and effectively. On-the-job training is the most effective kind of framing to a trainee, imparting him with the technical skills and know-how at the actual work site. In this type of training, a trainee is assisted and trained by a trainer when the trainee is actually doing the job. This helps the trainee not only to acquire the
: theoretical and practical skills simultaneously
but also enables him to learn from the experiences of his trainer and thereby can increase his efficiency and productivity.
(iv) Migration : Migration refers to the movement of people from underdeveloped or developing countries to developed countries in search of better avenues. Migrations contribute to human capital formation as it facilitates the utilization of inactive or underdeveloped skills of an individual. The cost of migration involves cost of transportation and cost of living at the migrated places. Usually, the cost of migrating is very high due to the high cost of transportation and high cost of livelihood in the developed countries. But still, people migrate in search of better job opportunities.and handsome salaries. Migration of human capital helps the underdeveloped countries to acquire technical skills, efforts reducing methods and efficient way of performing tasks.