What Are the Different Types of Human Capital Investments?

Human capital investment refers to a country's investment in education funding and technical training for economic development. Western economists believe that investment in education is the most effective investment; such investment can enhance the knowledge, technology and capabilities of the entire population. However, in national production statistics, education expenses and health expenditure are considered as a kind of consumption; in capital stock statistics, attention is paid only to the stock of physical capital, but not to the stock of human capital. In the theory of human capital, the costs of education and training are divided into two categories: one is education costs, including government-sponsored funds and tuition fees paid by individuals; the other is the income that students give up, that is, Income forgoing to work for school. These two expenses are the most important content of human capital investment. ^[1]

Human capital investment

It contains the following basic meanings:

1. Human capital investment first needs to identify investors, that is,

Formal education at all levels

This form of investment increases the knowledge stock of human capital, which is reflected in the level of general education in the composition of human capital, which is reflected by education

China's Human Capital Status and Investment Issues

I. The views on the current status of human capital are relatively consistent, mainly in the following aspects:

(1) Although China has a large population, its high-quality population is seriously insufficient;

(2)

(1) Continuity and dynamics of human capital investment

Similar to investing in engineering construction, human capital investment must also be made continuously. Marx believes: t. If the project is not continued, the means of production and labor already consumed in production will be confessed. Even if the project is restored later, it will continue to be damaged during this interval. The continuity of human capital investment is reflected in the investment of human capital at all stages of the life course. After completing a certain formal education, a person enters the society and engages in productive labor.

The most fundamental meaning of investment is to sacrifice a certain value for a certain future value. From this most basic meaning, it has been revealed that investment has two outstanding characteristics: time and risk. In fact, the time gap between present sacrifice and future reward has already foretold or latent risks or crises, because the various conditions and factors experienced during it may change over time.

Human capital investment also has the problem of the time gap between current investment and future returns and the risk of whether the investment cost can be recovered. This basic characteristic will not disappear or change because its return is greater than the return of physical investment.

Human capital investment moral hazard

This risk is caused by the diversity of investment entities and inconsistencies between investors and beneficiaries. People are subjective, and different people have different values and personal goals. Therefore, when human capital is outflowed, human capital, which is the knowledge, skills, and abilities shown in workers, has an inseparable characteristic, which causes investors to suffer losses. In a sense, this investment risk is moral hazard.

Human capital investment disruption risk

This risk is caused by investment discontinuities. The continuity of human capital investment is reflected in the need to invest in human capital at all stages of the life course. After completing a certain formal education, a person enters the society to engage in productive labor, needs to receive various on-the-job training, and exits the labor process to participate in a variety of continuing education. He cannot interrupt human capital investment because he is at a certain stage in his life course Interruption is the depreciation of human capital. In terms of time span, human capital investment must run through a person's life. In addition, the form, content, and purpose of human capital investment are different in different periods. Human capital investment is not static, it is a dynamic process that is constantly developing and sublimating. Once the investment cannot be continued, the use of human resources will be restricted and the initial investment will not be recovered.

Human capital investment output risk

This risk is caused by the long-term nature of the investment. The return of the same human capital investment often varies greatly, which is fundamentally different from the result of physical capital investment. In the short term, better investment projects may not stand the test of time. According to some surveys conducted by Burt Consulting in 2002, in human capital investment behavior, there are often hot majors when applying for exams and no one waits until graduation. Intriguing phenomenon. In addition to general market risks, there are risks from investment objects. If during the investment recovery period, the human capital bearer moves between regions or countries, or if he loses his life or ability to work before he has worked or his working life has not reached the recovery period, all or part of his human capital investment will be made. Loss, which increases investment risk.

Human capital investment depreciation risk

This risk is caused by the lag of investment returns. With the development of science and technology, the part of commodity value from direct labor has become a dependent factor. On the contrary, the value of commodity mainly depends on the progress of science and technology and its application in production. Therefore, the loss of human capital investment risk caused by technological progress is staggering.

Human Capital Investment Irresistible Risk

The "irresistible risks" include earthquake disasters, wars, plagues, changes in national political tendencies, industrial structure policy adjustments, the closure of entrusted training institutions, etc., and the death or incapacity of human capital owners due to unexpected accidents. However, because it is unpredictable and irresistible, and it is a relatively small probability event, the risks of human capital investment activities are generally not considered. ^[2]