Group 12 Human Capital
The purpose of our study is to identify the importance of human capital in today's economy.
- How does the education and development of workers effect a certain country's economic success?
- How does the structure of a workforce lead to production problems and successes.
- How and why do governments effect human capital?
By looking at these questions in great detail, we hope to see how human capital effects the economy.
What is human capital?
In a basic idea, human capital is all of us..... or you could say it is a way of defining and categorizing peoples' skills and abilities as used in employment and otherwise contribute to the economy. Many early economic theories refer to it simply as labor, one of three factors of production, and consider it to be a commodity -- homogeneous and easily interchangeable. But other conceptions of labor are more sophisticated.
In simpler terms, human capital is the specific abilities workers sell for wage...
Importance
It is important to understand how human capital works in an economy because:
- it effects our worth in the labor force
- it effects the economy and nation's wellbeing
- it effects the diversity and qualifications of a workforce
- it effects everyone's personal lifestyle
Burger's Area
I will be looking at how countries develop their human capital and the importance of education in that development. I will use a series of case studies to look at the relationship between education and economic growth.
- South Korea
- The South Korean economy has grown by nearly 8% each year since 1960 and has been the fastest growing economy since then.
- What has made South Korea Successful, among other things, is its improved education system and the its worker development.
- Between 1945-1961, enrollment in schools increased on every level.
- Adults with formal education increased from 64% to 92%.
- United States
- The importance of education cannot be underestimated. The United States' slip in educational power in relation to other powers has become a cause for concern. I will examine why the slip is occuring and reason, if there is one, to be worried.
- China and India
Kogel's Area
The Structure of Human Capital
I will be looking at the structure or workforce of human capital, selecting Japan and the U.S. in order to compare extreme differences.
- By using the term structure, our group means contracts, worker's demeanor, and the relations between workers and employers which result in the production of goods
- Specifically speaking, I want to look at how different societies determine the value of human capital. We will be looking at employment statistics and population statistics in the US and Japan, and then describe the Japanese salaryman in comparison to an American company worker. We will conclude by taking economist Paul Krugman's comments on the Japanese economy into view in order to gain a greater perspective on the effect of Japanese society on its economy.
Step 1: Statistically Breaking Down the Labor Force
Analysis
- Unemployment Rate: While Japan's unemployment rate has been consistantly lower than America's, in the past 10 years, it is important to call attention to the definition of what is unemployment in Japan. While people are employed, they are not being employed in full time jobs, and the unemployment raise has risen recently.
- Working hours: traditionally Japan has been known as the home of the world's "working samurai." At the office by 9am, out at 11pm, Japanese workers are seen as both productive and dedicated. As seen by the recent numbers, however, American workers are not that much different.
- Job Changes: Due to lifetime contract (of the past), workers could not switch companies, because to do so would mean forgoing benefits and losing face. Nowadays, however, the numbers speak of a different working force who are more willing to change jobs.
Overall Japan and the US are different environments for human capital. The unemployment numbers vary greatly, as well as the fact that workers in Japan are starting to take temporary employment over the lifetime employment contracts. These differences indicate two different cultures and employment systems.
Step 2: Contract Structure
America:
"Survival of the fittest" best describes the American labor contract. If you have the skills to get a job done, and you are offering those skills at a competitive price, you will get the job. Wages will be driven up if your skills meet a specific need.
