HUMAN CAPITAL THEORY & SIGNALLING THEORY
Human Capital Theory:-
The human capital theory is that investments are made in human resources so as to improve their productivity and therefore their earnings. Costs are incurred in the expectation of future benefits; hence, the term “investment in human resources.” Like all investments, giving good education is also one of the investments we can consider in India.
With the above we came to know that the investment made on education of humans will directly affecting in the productivity that means the people with more education will be having more skills than less educated & not educated people. The wages rises due to productivity increases and vice versa. As the wages increases the educational level of the people will again increases and with that again productivity increases. In a …show more content…
Signalling theory is basically depending on the education of the workers and with education the skills of the workers increase. When the skills increase directly the wages will also increase irrespective of productivity.
Most Relevant Theory In India:-
Looking in to both the theories, the human capital theory is most relevant to a country like India where we have to give importance to both education levels and productivity also. Because only with higher education we cannot offer higher wages, it’s always very important that when education levels increases in the mean time the skills of workers should also improve with that productivity will also improve.
With that the human capital theory is more relevant to Indian economics. References:-
Human Capital Theory:-
The human capital theory is that investments are made in human resources so as to improve their productivity and therefore their earnings. Costs are incurred in the expectation of future benefits; hence, the term “investment in human resources.” Like all investments, giving good education is also one of the investments we can consider in India.
With the above we came to know that the investment made on education of humans will directly affecting in the productivity that means the people with more education will be having more skills than less educated & not educated people. The wages rises due to productivity increases and vice versa. As the wages increases the educational level of the people will again increases and with that again productivity increases. In a …show more content…
Signalling theory is basically depending on the education of the workers and with education the skills of the workers increase. When the skills increase directly the wages will also increase irrespective of productivity.
Most Relevant Theory In India:-
Looking in to both the theories, the human capital theory is most relevant to a country like India where we have to give importance to both education levels and productivity also. Because only with higher education we cannot offer higher wages, it’s always very important that when education levels increases in the mean time the skills of workers should also improve with that productivity will also improve.
With that the human capital theory is more relevant to Indian economics. References:-