ECO DEV 4.2

• The _______

  included those of the middle class who were believed to exploit those of the working class.

  bourgeois class of people
• The _______ was also believed to blame people for any defects that happened in the

  system and of making capitalists out of workers.

  human capital theory
• By _________ we mean the skills and knowledge that workers acquire through education and

  training.

  human capital
• This ______ that is, knowledge and skills, are accumulated by human beings

  through _____ during the time they spend in primary and secondary schools and up to graduation and post-graduation in colleges or universities.

  human capital and education
• ACCORDING TO HIM the improvement in the availability and quality of education

  results in higher level of functionings and capability of labour.

  Prof. Amartya Sen
• HE has shown in his works that for

  a country a low level of education lowers the growth of GDP due to shortages of labour with

  appropriate skills.

  Prof. Amartya Sen
• _______, though less tangible than _____, is similar to it in many ways.

  Human capital AND physical capital
• Like physical capital, accumulation of _________ increases the ability of a country to produce more

  goods and services.

  human capital
• Secondly, like physical capital, _______ is a produced factor of

  production.

  human capital
• is built through acquiring more education or skills by spending more time in school,

  college or university.

  Human capital
• That __________ has a cost can be easily illustrated.

  investment in education or human capital
• ______ are

  generally concerned with the opportunity cost of time spent in acquiring education or human

  capital.

  Economists
• If you are attending a class acquiring education you cannot be working simultaneously at

  a job yielding you some income. T OR F

  TRUE
• Therefore, by attending computer classes you forgo some wages or earnings and hence some consumption which represents the cost of acquiring ______

  Human Capital
• The following are the main approaches that have been developed to gauge the productivity

  of investment in education

  The Residual Approach or Production Function Approach, Rate of Return Approach, and Schultz Approach
• This is sought to be done by first determining the increase in gross national product on account of the measurable inputs of labour and capital.

  The Residual Approach or Production Function Approach
• Then

  this figure is subtracted from the figure of GNP, to get a ‘_______’ which represents the increase in

  GDP due to the improvements in the quality of labour as a consequence of education.

  residue
• was one of the first economists to measure the contribution of human capital

  to economic growth

  Professor Solow
• In this approach rate of return is calculated from expenditure made by individuals

  on education and the measurement of the flow of an individual’s future earnings expected to result

  from education.

  Rate of Return Approach
• This method has been used by ________who measured income differential

  arising from the cost or expenditure incurred on acquiring a college education in the United States.

  Rate of Return Approach and Gary S. Backer
• Comparing Expenditure on Education with Income Earned

  Schultz Approach
• Another approach to measure the contribution of education is based upon the analysis of the

  relationship between expenditure on education and income.

  Schultz Approach
• Using this approach _____ studied

  the relationship between expenditure on education and consumer’s income and also the

  relationship between expenditure on education and physical capital formation for the United States

  during the period 1900 to 1956.

  Schultz
• In the above analysis it is explained that _____ is regarded as investment and like investment

  in physical capital, it raises productivity of the labour and thus contributes to growth of national

  income.

  education
• The decreased earnings or higher wages made by more educated workers have been

  considered as benefits not only to the private individuals, but also to the society as a whole. T OR F

  false
• This

  is because ________ presumably reflect higher productivity, increased output in real as well

  as monetary terms.

  higher earnings