Identify the statement that correctly relates to human capital.

A. It is based on the idea that education and health are not integral to human well-being.

B. It considers education and health as a means to increase labour productivity.

C. It treats human beings as a means to an end (increase in productivity).

D. It considers any investment in health and education as unproductive if it does not increase output of goods and services.

E. It considers human beings as ends in themselves.

Choose the correct answer from the options given below :

B, C and D only

The correct answer is option (4): B, C and D only

Options A and E are incorrect in the context of human capital theory because:

• A. Education and health are integral to human well-being, contrary to the statement.
• E. Treating human beings as ends in themselves is more aligned with human development and welfare economics, not the human capital approach

HUMAN CAPITAL AND HUMAN Development: The two terms sound similar but there is a clear distinction between them. Human capital considers education and health as a means to increase labour productivity (B). Human development is based on the idea that education and health are integral to human well-being because only when people have the ability to read and write and the ability to lead a long and healthy life, they will be able to make other choices which they value. Human capital treats human beings as a means to an end (C is correct, E is incorrect); the end being the increase in productivity. In this view, any investment in education and health is unproductive if it does not enhance output of goods and services (D). In the human development perspective, human beings are ends in themselves. Human welfare should be increased through investments in education and health even if such investments do not result in higher labour productivity. Therefore, basic education and basic health are important in themselves, irrespective of their contribution to labour productivity.