Final answer:
Human capital represents the capacity to take action, encompassing an individual's skills, knowledge, health, and education that contribute to their productivity. This aligns with the capability approach, which emphasizes the importance of providing resources to respect individuals' dignity and support their diverse needs. Human capital thus reflects the quality of labor and is fundamental to economic productivity.
Step-by-step explanation:
Human capital can be viewed as the capacity to take action. Human capital encompasses the information, skills, knowledge, education, and health that individuals possess, which enables them to be productive members of the workforce. As such, it is a form of investment in workers, which in turn shapes their ability to translate time into production. A tangible example of this is shown in an experiment in Guatemala, which found that children who received nutritional supplements during childhood became more productive adults, earning higher wages as a result of the improved health—a crucial component of their human capital.
The capability approach, which is aligned with the concept of human capital, advocates for acknowledging and supporting the diverse needs and freedoms of individuals, rather than just their achievements. This philosophy ties into the work of thinkers like Martha Nussbaum, who argue for the provision of necessary resources to individuals, ensuring that their lives meet a standard worthy of the dignity of a human being, as stated by Nussbaum. In relation to business and economics, human capital reflects the quality of labor, as opposed to simply the quantity, and is inherent in the productivity and potential earnings of individuals and, by extension, the economy.