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Human capital investment leads to human development, improving experience, knowledge, health, and morale. It allows individuals to create a better life, increase earning potential, and contribute to society. Highly skilled individuals can develop vaccines and cures, and instilling good morals reduces criminal tendencies.
The relationship between human capital and human development is the fact that any investment in human capital has the effect of leading to human development. In other words, human capital is a facilitator of human development. Human capital refers to all those factors that improve a person’s experience, knowledge, health and morale. Such human capital can be deposited through informal and formal means of training and educating people, as well as through different means of health care aimed at maintaining good health.
Human capital and human development are linked by how increases in human capital enable an individual to create a better life. For example, someone who has received training as an engineer has been deposited in human capital that he can use to make a living. Using the skills learned and honed as part of the human capital improvement process, this person will create conditions that will further facilitate development through the ability to earn money and live an independent and comfortable life. Individuals who undergo professional training as part of their investment in human capital will also be able to increase their earning potential. While these benefits are on an individual basis, human capital and human development are also linked more generally.
Someone who has a wealth of human capital can use this repertoire of knowledge, not just for their own human development, but for the development of the community and even the world at large. Examples are highly skilled scientists who use their knowledge, experience and training to develop vaccines and cures for various forms of disease. This is a direct link between human capital and human development because such medicine can help in the prevention and treatment of different types of diseases.
Similarly, people with heavy investment in human capital can also use knowledge in community development in fields such as business, engineering, art, and law. All of these contributions to society help move it forward and are the result of the input of human capital into individuals. Furthermore, the instillation of good morals in individuals shows a link between human capital and human development, as such an investment helps reduce criminal tendencies and prevent societal degradation.
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