Given below are some statements. Read them carefully and choose the correct statement (s) from the given options.

Statement 1: In the age of globalisation and liberalisation, human capital has become perfectly mobile between countries.   

Statement 2: The peers, educators and society influence the decisions regarding human capital investments at the tertiary level.

Only Statement 2 is correct.

A substantial part of the human capital formation takes place in one’s life when she/he is unable to decide whether it would maximise her/his earnings. Children are given different types of school education and health care facilities by their parents and the society. The peers, educators and society influence the decisions regarding human capital investments even at the tertiary level, that is, at the college level. Moreover, the human capital formation at this stage is dependent upon the already formed human capital at the school level. Human capital formation is partly a social process and partly a conscious decision of the possessor of the human capital.

The two forms of capital i.e. Physical and Human, differ in terms of mobility across space. Physical capital is completely mobile between countries except for some artificial trade restrictions. Human capital is not perfectly mobile between countries as movement is restricted by nationality and culture. Therefore, physical capital formation can be built even through imports, whereas human capital formation is to be done through conscious policy formulations in consonance with the nature of the society and economy and expenditure by the state and the individuals.