Human capital education and economic growth - Tips to take care of your money every day

Table of Contents

Summary

The objective of this research is to contribute to the analysis of why the education of human capital is essential for economic growth in a country, based on the premises of human capital as a generator of growth and well-being, for which the present study develops a methodology to measure the economic growth of a country through different indicators in education and human capital.

Education is one of the most influential factors for the advancement and progress of people, societies and countries, through it people acquire knowledge that can be applied in the industry, which every day requires mostly trained people due to scientific changes and accelerated technology.

Particularly it is necessary to consider education as a work that is carried out between public servants and society, but above all, it is an act of conscience and responsibility that human beings must adopt to achieve economic growth as a country and achieve better quality. of life.

The education of human capital is considered as one of the most important factors to eradicate inequalities, poverty, corruption and illiteracy and consequently return to economically productive and competent people within the economic unit.

Abstract

Particularly, education must be considered as a work carried out between public servants and society, but above all, it is an act of conscience and responsibility that human beings must adopt to achieve economic growth as a country and achieve a better quality of life.

Introduction

Previously, the economic growth of a country was mediated through the number of factories, work tools, machinery and territorial extension that a country had, however, currently the knowledge and skills of capital human that society has been considered the main triggers of economic growth.

Education linked to human capital has been a process that has boosted the economic growth of countries since human capital is considered by companies as a fundamental factor for achieving successful results in organizational processes, however not all people In a society they have the opportunity to develop and improve their human capital because they do not have a higher level of education, which leads them to remain behind and expect to find jobs in which they cannot continue to grow and develop.

In addition, the increase in schooling years increases the productivity of work and therefore economic growth, education is necessary to reduce birth rates and illiteracy, on the other hand, it also reduces poverty while providing personal fulfilment of individuals of a society.

Theoretical framework

To have a clear understanding of the main theories related to the acquisition of human capital through education and as a driver of economic growth, it is important to understand the following concepts defined by Vecino & Zaldívar (2017):

Human capital: It is the investment in people as a fundamental factor for the growth and well-being of countries.
Education: It is the practical and methodological training that is given to a person in development and growth, and is also considered a common denominator of the idea of improvement, linked to an ideal vision of man and society.
Economic growth: It is understood as the positive evolution of the living standards of a territory, measured in terms of the productive capacity of its economy and its income within a specific period of time.

Human capital was forged throughout history, using knowledge, from nomadic societies to the present day. Knowledge is the engine that has boosted wealth in different societies. Talking about training that is directly involved with knowledge is no longer an option but a necessity. Human capital has a favourable impact on the growth rate of a country and this human capital constituted by people with a high level of training has, in turn, a high relationship with technological progress.

Education is an investment that is reflected by the difference between the initial income against the futures, that is, that current economic perceptions can be increased if the person decides to invest in their academic training, due to having more knowledge and skills this will improve your performance in the labour market.

In this context it is important to emphasize that education is one of the most influential factors for the advancement and progress of people, societies and countries, which has acquired greater importance due to accelerated scientific and technological changes, it is also important to take taking into account that the demands of the labour market increasingly force people to continue with a formal education to obtain better working conditions, in addition, education results in more skills, better productivity and greater capacity of workers to improve living conditions, by combining experience, training and professional training. All these characteristics form the necessary human capital in modern production.

In economies with a high concentration of income, education plays an important role in its distribution since one of the reasons for this difference is the training and training of workers, which results in an increase in the productivity of the company and as a consequence a greater benefit for the individual and the country.

Adam Smith cited by Hierro (2019) mentions the importance of society for the development of the individual: All members of human society need the assistance of others and are equally exposed to reciprocal impairments and with this Smith gave great relevance to education as an individual and social developer, he placed great emphasis on the importance of skills and abilities to perform jobs and investment in education as a fundamental component to develop skills and abilities of individuals, and how they could contribute to the economic growth of a country.

Robert Emerson Lucas cited by Herrera (2019) considered the general level of skills as human capital and concluded that a more educated person is not only more productive but also increases the productivity of all production factors and that a low level of human capital generates that physical capital is less productive and if both are lower than those of other economies, their level of income will also tend to be lower. This is why it is appropriate to emphasize that education is one of the necessary conditions to achieve economic growth.

On the other hand, Theodore W. Schultz cited by Trujillo, Silvera, Giraldo & Palma (2018) gave the guidelines to understand that investments in human capital, in turn, are activities, such as education, job training, medical care or everything that attempts to acquire information about the economic system, which influences future real income. By investing in themselves, human beings increase the field of their chances of having greater well-being, since any worker when inserted into the productive system not only brings their physical strength and natural ability but also comes with a trunk of knowledge Acquired through education.

The individual incurs education expenses at the same time as an opportunity cost to remain in the economically inactive population and not receive current income, however, in the future, his training will grant him the possibility of obtaining higher salaries. It is important to highlight that in terms of economics, education is considered one of the most important factors to eradicate inequalities, poverty, corruption and illiteracy and therefore is directly influencing human capital since it contributes Progress and progress in people, societies and countries, on the other hand, the integrated management of human capital is the set of policies, objectives, goals, responsibilities, regulations, functions, procedures, tools and techniques that allow internal and external integration. Internal to the processes of human resources management and external with the organizational strategy, through labour competencies and superior work performance and the increase of labour productivity, therefore it is the fundamental basis for human, organizational development and territorial both from the economic, political and social and natural edges in the environments where it is exercised (Herrera, Velázquez & Torralba, 2018).

Conclusions

Education is a right that is guaranteed in most of the constitutions of the different countries of the world and it is also considered a great investment since if in a country there is a population that has higher levels of education it is expected that they can develop and improve its human capital which would result in economic growth due to an increase in productivity. On the other hand, individuals in a society are willing to invest time and effort in preparing themselves because in most cases they have the opportunity to access better income and better living conditions..

Finally, education results in more skills, better productivity and greater capacity in people to improve their living conditions. Therefore, education is considered to be an essential basis for economic growth because it is a factor that conditions and promotes the development and improvement of human capital and therefore encourages a country and its individuals to possess greater monetary resources, which leads to the generation of greater well-being for both parties.