A study compares developing and developed countries over many years. It finds that measures of education and health in developing countries are coming closer to those of developed countries, but their per capita real incomes are not. What does this finding show?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Human capital in developing countries has grown faster than their per capita real income.
The finding shows convergence in human capital but not in income. So human capital has grown faster than per capita real income.
Option (1) Higher income in developing countries has caused their faster growth of human capital. — Incorrect. Their income has not grown that fast, so it cannot explain the faster growth of human capital.
Option (2) Measures such as years of schooling fully reflect the quality of education in developing countries. — Incorrect. Years of schooling and enrolment may not reflect the quality of education. This is a measurement problem.
Option (3) Developing countries now have more human capital per person than developed countries. — Incorrect. Coming closer means the gap is narrowing; it does not mean overtaking.
Option (4) Human capital in developing countries has grown faster than their per capita real income. — Correct. Human capital caught up, income did not.
NCERT (2026-27): “Human Capital and Economic Growth: … Empirical evidence to prove that increase in human capital causes economic growth is rather nebulous. This may be because of measurement problems. For example, education measured in terms of years of schooling, teacher-pupil ratio and enrolment rates may not reflect the quality of education; health services measured in monetary terms, life expectancy and mortality rates may not reflect the true health status of the people in a country. Using the indicators mentioned above, an analysis of improvement in education and health sectors and growth in real per capita income in both developing and developed countries shows that there is convergence in the measures of human capital but no sign of convergence of per capita real income. In other words, the human capital growth in developing countries has been faster but the growth of per capita real income has not been that fast. …” |