Poor countries tend to be unhealthy, and unhealthy countries tend to be poor. Across the broad swath of history, improvements in income have come hand-in-hand with improvements in health. Further, the poorest countries of the world are in the tropics, an area rife with tropical disease. These stylized facts lead to a natural question: does disease hold back development? It seems possible that it would. Health is a kind of human capital as well as an input to producing other forms of human capital. Being unhealthy depresses the ability to work productively and/or the ability and incentives to invest in human capital. Taken together, these mechanisms imply that worse health implies lower income. The correlation between health and development is hard to interpret simply as the causal effect of health on income. Third factors such as bad government or geographic disadvantages might impede both productivity and disease control. Health is also a normal good: when people get richer, they invest more in their own health, and exhort their governments to spend more on public health. The correlation between health and income might be one of circular and cumulative causation: health affects income and income affects health and so on.
Human capital formation is the outcome of investments in education, health, on-the-job training, migration and information. Which two of these are very important sources of human capital formation?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Education and health
Of the five sources of human capital, education and health are the very important ones.
NCERT (2026-27): “4.5 State of Human Capital Formation in India In this section we are going to analyse human capital formation in India. We have already learnt that human capital formation is the outcome of investments in education, health, on-the-job training, migration and information. Of these education and health are very important sources of human capital formation. …” |