What Are the Different Types of Human Capital Theory?

The theory of human capital (HCM-Human Capital Management) originated from economic research. In the 1960s, American economists Schultz and Becker founded the theory of human capital, which opened up new ideas about human production capacity. The theory holds that physical capital refers to capital on material products, including plant, machinery, equipment, raw materials, land, currency, and other securities; human capital is the capital embodied in humans, that is, the education of producers, The sum of vocational training expenditures and their opportunity costs when receiving education is expressed as the sum of various production knowledge, labor and management skills, and health qualities that are contained in humans.

Human capital theory

Human capital management is not a brand-new system, but is based on human resource management. It integrates the two analysis dimensions of "person" management and economics and "return on capital investment", and treats people in the enterprise as capital. Investment and management, and based on changing human capital market conditions and

According to the definition, human capital management can be understood from two aspects, namely:

1. Management of the external elements of human resources--quantity. Quantitative management of human resources is to properly train, organize and coordinate human resources in accordance with human and material resources and their changes, so that the two often maintain the best ratio and organic combination, so that both human and material can fully exert their best Good effect.

2. Quality management of the internal elements of human resources. Mainly refers to the use of modern scientific methods to effectively manage people's thoughts, psychology and behaviors (including the coordination, control and management of the thoughts, psychology and behaviors of individuals and groups), and to give full play to human subjective initiative to achieve Organizational goals.

The objective requirements of modern enterprises for human capital management systems arise from the

Human capital management is

Of all the resources that human beings have, human resources are the most precious and naturally become the core of modern management. keep improving

Human capital theory is actually an example of a complete research framework: it cannot be reduced to a single theory, but exists as an application of standard capital theory to some economic phenomena; at the same time, it is more comprehensive in itself A sub-frame in the neoclassical research framework because it is nothing more than the standard neoclassical concept in

Human capital theory education

The state of education in China is booming. But education investment in the past 20 years has not been enough. In 1995, the education expenditure of Chinese governments at all levels accounted for 2.5% of GDP. At the same time, China s physical investment (for example, investment in buildings, infrastructure and machinery and equipment) was relatively high for a long time, accounting for 30% of GDP. %the above. In the United States, the proportion of human capital and physical capital investment is 5.4% and 17%, respectively. During the same period, Japan s education investment as a percentage of GDP was 3.6%, the Philippines was 3%, and the world average was 5.2%. China's share of education investment in 1995 was relatively low. From 1991 to 2002, the proportion of Chinese government's investment in education increased from 2.5% to 3.3%, an increase. At the same time, non-governmental investment in education has grown rapidly, from 3.3% to 5.2%. In 2003, the Chinese government's investment in education accounted for 5.3% to 5.4% of GDP, and material investment accounted for more than 50% of GDP. Compared with other countries, more funds were invested in material.

The benefits of human capital investment are fundamental and the returns are greatest. What I mean by human capital includes not only formal education in schools, but also other inputs and trainings that enable people to acquire some skills. At present, the growth of China's education capital investment is lower than that of other countries in the world, and it is even lower than China's material investment. Moreover, there is inequality in human capital investment, such as regional and urban-rural differences. This inequality has led to low returns on physical capital investments and impaired returns. A more balanced investment in education will promote economic development and reduce long-term economic imbalances. If the proportion of private investment is continuously increased, talent education will be greatly promoted. We have always believed that the education market and the labor market are separate, but in fact they are closely linked. An open labor market and an effective lending market can effectively introduce resources to cultivation, reduce various restrictions in the labor market, and ultimately reduce the cost of human capital, saving a lot of funds for the government.

Let's briefly review human capital and technology. An obvious rule is that if a person receives education, he will have the skills, be able to do many things, quickly adapt to this changing society, and effectively exercise social functions. I do not need to repeat how fast China is developing. I should realize that skilled labor will bring more benefits to China's development. According to world standards, the proportion of China's college-educated population is still relatively low. In order to adapt to the changes in China, to further maintain investment in physical capital, and to expand the opening of labor force, more college-educated people are needed.

Data show that Heilongjiang Province's university-educated population accounts for 4.87% of the total population, Beijing is 20.49%, and Shanghai is 15.07%. It can be seen that China's talent market is unevenly distributed. For China as a whole, this proportion is also quite low, only 4.7%. In the United States, this proportion is 25% to 30%. The constant introduction of new technologies requires skilled and educated people to operate. A principle of economics is that to obtain the best return on human capital investment and physical capital investment, a balance is required, and investment balance is required in all geographical areas. The problem is that China does not invest enough in human capital. One region has less investment than another. The overall investment in education is less than in other countries. Another problem in China is that public investment in education is small, and funding comes mainly from the government. There are large differences in education investment between regions and the form of education is also different.

According to the data of China's education investment in 2001, the education cost of each student in Beijing is nearly 10,000 yuan, while some provinces only have more than 1,000 yuan, which is one sixth of Beijing. Because of different geographic locations, investment in education varies greatly. Beijing and Shanghai have high GDP and relatively more investment in education, while regions with less GDP have less investment in education. The importance of birthplaces can be seen. A good policy should change the phenomenon of "birth in a richer region and get higher education input". At the same time, even in the same affluent areas, the proportion of government investment in education is very different.

Let's discuss relying on private investment to promote education. This is important to address unfair and low-efficiency education, but it needs to be treated with caution. If tuition fees are collected, more resources can be used for teaching, but this requires the establishment of a good loan system. Students can repay this money in the future according to their income. It is necessary to pay attention to the educational costs of urban and rural families Inequality. It can be seen from the 1999 expenditure table of Chinese urban households that urban households invest 12.2% of their children, which is quite high, but it is even higher in rural areas, reaching 24%. In China's underdeveloped areas, education is 16% and rural is 34%, which causes trouble for children whose families are not in good financial condition.

China has a low rate of return on investment in human capital, while material investment is more invested and more profitable. China's investment income in education is still increasing. Wage policies have lower returns for skilled workers, and even those with very high skills earn less. There are still some restrictions in the labor market, and even with technology, income may still be low. But it is surprising that those who have good technology have very high output and high returns. In the 1980s, wages were only 10% of production efficiency. This proportion cannot stimulate workers to continue to receive new education, that is, their education has not been given the opportunity to continue to develop. Until 1997, investments in education brought in excess wage returns.

Human Capital Theory Research Organization

Human capital research institutions are mainly divided into several categories, one is a state-owned research institution (such as the Academy of Social Sciences), one is a joint venture research institution (such as Burt Consulting), and the third category is an international research institution (such as SHRM); In contrast, state-owned research institutions are more academic, joint venture research institutions are more pragmatic, and international research institutions are more future-oriented.

Human capital theory labor investment

There are also problems with investing in the labor market and human capital. For example, investment is mostly concentrated along the coast and materially, not on the mainland and human capital. I think one way to motivate everyone to receive education and training is to get education after leaving school, like giving subsidies. Normally, people would suggest increasing government investment in education. Another aspect is complementary, opening up the labor market and education market, and letting the market decide how to stimulate people to obtain new education and training.

An open market will lead to more inequality, which is a phenomenon that exists in the initial stages of opening up in many countries. A major education policy is to reduce this inequality. An effective way is to obtain more human capital investment and reduce inequality through migration. An open labor market should reduce inequality in this area, rather than create inequality in all aspects. The actual return on education investment in China has reached a high level of 30% to 40%, and even if halved, 15% to 20% is very high. By increasing investment in education, the performance of China's economic growth will be strengthened through the increase of human capital, and will also be enhanced through education equality. In particular, investing in a more balanced way between physical and human capital and reducing the educational gap between regions can reduce this imbalance and inefficiency in educational investment.

Both human capital and physical capital investment need to grow, and greater investment in human capital is needed, which will generate a stimulus mechanism. An open labor market will stimulate people's access to education and training, and enable China to obtain better human capital and a more equal labor market. ^[1]