Question

what are the main principles of the human capital approach and is it another name for the endogenous model.

Answer 1

Human capital is the stock of education and skill of the workforce. It is considered as capital because an increase in human capital increase the productive capacity of the economy . Human capital includes an improvement in the mental capability ,skill and physical capability of people .The two important main principle of human capital approach are :a. health b. education and skill development.

Education and health contribute growth in different ways. Education helps in creating more productive labor force with increased knowledge and skill, that lead to the employment opportunities to people and thereby increases the standard of living .when standard of living increases they give more importance to health facilities like sanitation , safe drinking water , good medical facilities etc....

Endogenous growth theory assumes that the long run rate of growth is primarily determined by endogenous variable that are internal to the system such as human capital , innovation and investment capital. Endogenous model assume that the key determinants of economic growth are population growth and the accumulation of human capital and knowledge As per endogenous model the enhancement of a nation 's human capital will led to economic growth by means of new forms of technology and efficient and effective means of production.knowledge based institution play an important role in economic growth.

conclusion

Human capital is intangible asset . The human capital approach includes knowledge base of the employees and  is often measured by the quality of the product. It is believed that investment in education and health brings about an indirect increase in the well being of human through increase in incomes. In endogenous model of economic growth the human capital and financial assets of company are taken into consideration .