Why is it important to invest in people ?

Human capital is a term popularized by GARY BECKER , an economist from the University of Chicago, and JACOB MINCER that refers to the stock of knowledge, habits social and personality attributes including creativity, embodied in the ability to perform labor so as to produce economic value .

What is human capital ?

Every one has different skills and knowledge that help to make them productive.

This is called their human capital .

Economists used to treat labour as one big mass of workers, but from the 1950s the economist 

Gary Becker took another perspective .

Becker distinguished between human capital specific to certain firms , such as how to use 

proprietary software, and general human capital, or skills that a worker can use elsewhere .

Becker spotted that people acquire knowledge at their own expense such as paying for study to increase future earnings .

Becker assumed that people would calculate how much to invest in their own human capital to get the best return .

However now behavioural economists recognise that not everybody is rational .

But beckers work is still important to day .

Technology is quickly making old skills obsolete, so it is vital to develop human capital through lifelong learning .