What does the statement mean "investment in human capital"?
Answer:
Investment in human capital refers to increased attention directed towards labour markets; aiming to improve the quality/quantity of labour in order to maximise long term gains. For e.g; re-education of the structurally unemployed is an investment in human capital resources, as they are reskilled and these addition skills will increase geographical/occupational mobility. This would increase production in the long run, if labour productivity exceeds capital productivity. Health care can help increase human capital also.
Short term costs are most probably the capital needed to fund these adjustments, and the opportunity cost of investing in labour rather than capital infrastucture or technology.
Putting up the $$$ to upbuild and uplift the human side of a country's assets. Education; affordable healthcare and housing; Crime prevention/juvinile delinquincy; child care; family leave; etc.
An investment in education has a very high return for the individual and the nation. One can analyze this investment just like an investment in physical capital (a factory, a dam, etc.). The "profit" from this investment is the increase in earnings over the life of the individual. The cost is tuition, fees, and books and most importantly the lost income from not working while going to school.
Thus the largest cost to a high school student thinking of going to college is the lost income for four years. Yet, the higher income over his working life will probably result in a very high rate of return on this investment. In a developing country, the rate of return is likely to be somewhere between 20 and 30% per year and in a developed country, 10 to 15%. This is higher than investments in most physical capital.
What does the statement mean "investment in human capital"?
It means to invest in the 'sex slave industry'.
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