Final answer:
Human capital refers to the accumulated skills, knowledge, education, and health of workers. Investing in human capital, such as through education and health, can improve productivity and economic growth. The government plays a significant role in society's investment in human capital through the education system.
Step-by-step explanation:
Human capital is best defined as the accumulated skills, knowledge, education, and health of workers. It refers to the quality of labor and how workers are able to translate their time into production. For example, investing in nutrition supplements during childhood can lead to improved health and increased productivity in adulthood, thus enhancing human capital. Similarly, obtaining higher education can boost productivity and earning potential, as it is considered an investment in human capital.
The government plays a significant role in society's investment in human capital through the education system. In most countries, a highly educated and skilled workforce contributes to economic growth. Average levels of education are considered one measure of human capital, and it can be observed that there has been a rise in the proportion of the population with a high school and college education in the United States over time.
Investing in human capital is crucial for both low-income nations and developed countries like the United States. It is widely believed that additional investment in human capital can increase productivity and facilitate economic growth. However, there also exist debates on the effectiveness of government spending on education in improving the actual level of education.