Human Resource and Economic Development

In this post, you will learn about the human resource and economic development. The human resources play dynamic function in the development of a country. Human resources development is the process of raising the skills, the knowledge, and the capacities of all the people in a society. 

In economic terms, it could be explained as the accumulation of human capital and its efficient investment in the development of an economy. In political terms, human resources development makes ready people for adult participation in political processes, especially as citizens in a democracy. From the social as well as cultural perspectives, the development of human resources assists people to direct fuller and richer lives, less tied by tradition. In brief, the processes of human resources development open the door to modernization.

Roles of Human Resources

You must note that human resources are available in two functions, viz. (A) as factor services, as well as (B) as units of consumption.

Human Resources as Factor Services

It is essential to consider that human resources, as factor services, offer labour and entrepreneurship. More people depict more resources.

As such, population growth does add to economic growth, and not irrelevantly. Few of the vital points to be considered from this perspective are as follows:

(a) Minimum Scales: Few infrastructures are only profitable with minimum density levels. Industrial output in several regions is subject to sturdy economy-of-scale effects. Where division of labour as well as scale economies are restricted by small populations, a raise in the number of people can have a positive scale influence that increases productivity as well as investment.

(b) Demographic Transition and Savings: Urban Development Committees (UDCs) possess populations with a great proportion of young dependents. When the child dependency ratio is large, the population comprises a comparatively large number of dependants consequently consumption will be high as compared to earnings and saving activity will be low. At the time of the demographic transition, the number of workers increases relative to consumers, income increases relative to consumption and savings hike.

(c) Capital Formation in Agriculture: In agriculture, the investor, saver and producer of capital are frequently the same unit — the family farm. In the off season, the family tidies new land, irrigates, constructs fences and barns, and builds roads, dykes and wells. With greater population growth, the farmer and his family will place more hours on this kind of capital formation raising the agricultural capital stock.

(d) Labour Force Participation: Greater dependency ratios go along with increasing rates of population growth. This may influence labour force participation with relation to hours worked, entry as well as retirement age, and women’s employment beyond house.

(e) Trade Specialisation: In the Heckscher-Ohlin model of trade, where a country majors in and exports goods that embody comparatively large quantities of its plenty factors, a high growth rate in one factor (labour) would facilitate the country to specialise in goods utilising that factor intensively. Presuming the nation is already exporting labour-intensive goods, it would merely specialise more and trade more. The developing labour supply facilitates the country to take part more in trade, and the profits it receives assist to offset diminishing returns.

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