The Concept Of Human Capital Economics (Doc)
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Added on 2021-01-03
The Concept Of Human Capital Economics (Doc)
Added on 2021-01-03
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ECONOMICS
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1SEMINAR QUESTION SHEET 6: HUMAN CAPITAL THEORY AND EDUCATION............1Theoretical oriented question......................................................................................................1Description of financial cost and benefits that individual faced in making decision ofinvestment in higher education...................................................................................................12. Explanation on education which performing as signalling role..............................................3Policy related questions...................................................................................................................41. Explanation on implication for government policy towards higher education for humancapital and signalling..................................................................................................................42. Explanation on factors which have influenced changes in financing of higher education inUK...............................................................................................................................................4Empirically-Oriented question.........................................................................................................41. a) Calculating gross rate of return...........................................................................................4b) Analysing the variation in the rate of return for the employees performing in two differentgroups..........................................................................................................................................52. a) Determining the reason behind inaccurate outcomes through data base............................5SEMINAR QUESTION SHEET 8..................................................................................................5LABOUR MARKET INEQUALITIES...........................................................................................5Theoretically Oriented Questions...............................................................................................51. Impact of increment in skill biased technological change on labour market outcome forunskilled and skilled workers in manufacturing sector...............................................................52. Explanation on impact of international increase in manufacturing industry has on labourmarket outcomes for unskilled workers .....................................................................................7Empirically-Oriented Questions.................................................................................................81. Calculating measures of inequality of two regions over 4 years............................................82.a Consistent measure for level of inequality............................................................................92.b calculation of level of inequalities........................................................................................9Policy-Focused questions..........................................................................................................10
1. Type of policies could be introduced through government for decreasing levels of wageinequality...................................................................................................................................102. Explanation on reason why policies are not popular and achievable from politicalperspective................................................................................................................................13CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................17
INTRODUCTIONEconomics is referred as study of scarcity and how people uses resources and toresponding to incentives along with decision making. It is social science which has presence ofdirect concern with consumption and production of services and goods. It studies aboutbusinesses, nation and government for making choices for resource allocation to satisfy needsand wants and for identifying how group must coordinate and organize efforts for attainingmaximum output. The present report will give discussion about description about financial costand advantage that any individual facing for decision making to invest in higher education or not.Furthermore, it will provide explanation about education to perform related to signalling rolealong with calculation of gross rates of returns for graduate employees and how it varies fromworkers in distribution of wages. In the same series, it will articulate about labour marketinequalities and government policies for introducing the decrement in level of wage inequality.SEMINAR QUESTION SHEET 6: HUMAN CAPITAL THEORY ANDEDUCATIONTheoretical oriented questionDescription of financial cost and benefits that individual faced in making decision of investmentin higher educationEducation is considered as one of most important decision for individual with context tothemselves and for country (Giloth, 2019). Many students are there who has taken loan fromfederal institution for their education and according to a survey, it is found that there are 9millions students who have taken loan from their education. Graph which shows individualhuman capital decision for their own education is as follows-1
With this investment, society also get benefited in higher tax revenues, improvement inhealth, increase in volunteering and voting and decrease in criminal behaviour. US society thinksthat admission in college makes them financial weak (Henderson and Scott, 2018). There aresome students who are benefited with high quality education at secondary level but did not enrollin college, did not invest for their education. Government have developed multiple strategies sothat individuals who are capable will complete their higher education and will make efforts tobright their future. Federal student aid policy is one among them. Government address severalsteps such as scholarship aid, tax credits, pell grants etc.With the result, now there are more than four out of five direct loan students whichmeans nearly 3 million recipients are there who take direct loan to invest in their education. Itsoverall benefits is that to develop the career, workers which have bachelor degree are earningnearly 1 million in comparison to workers who are just diploma holder (Greene and Lawler,2019). Full-time workers, with the age of 25 are nearly earning income of $360000. There areother cost too which students has to bear other than college fees. These cost are direct cost oftuition and fees but with government policy of tax credit and accounting for grants, students areable to offsets these costs. A graph which shows college earning premium over the time is asfollows-2Illustration 1: College earning premium over time( source: Investing In Higher Education: Benefits,Challenges and The State of Student Debt, 2016)
Therefore, with the help of government policies, many students are now capable fordeveloping their higher education and to develop bright future for them. Increase in cost ofcollege and board is the factor which affecting individuals decision to complete their educationbut by several policies of providing benefits, students are completing their graduation study.2. Explanation on education which performing as signalling roleSignalling is considered as idea by which one party convey its message to another party.One party means the agent and another party means principal. Signalling plays an important roleon the performance of worker. It is a process in which education act as signal which providesobservation to employee regarding selection of work. This is the process where worker whichhave higher ability will attain higher level of education. This will overall help in increasingproductivity of employee in organization. With the below diagram, it will be effectivelyanalysed.According to this graph, it can be analysed that signalling role in education play animportant part for developing someone's career. This graph predicts that equilibrium invest ineducation. It is because performance on job of employee will reveal its true ability in performingtask by building effective resume which relay on education. It also sorts between workers who is3
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