Chapter 2: People as Resource

‘People as a resource’ is a term that means how the population can be an asset and not a liability. It a way of referring to the working class of society in terms of their existing productive skills and abilities. The population becomes human capital when an investment is made in the form of education and training. Education and health also help human beings to be an asset to the economy. Thus, people as a resource refers to the working population that results in the development of society.

Human resources are different from other resources like land and physical capital because human beings can use other resources to give out productive output. However, resources like land and physical capital are dependent on human resource for their use and cannot give any productive output all by themselves.

Education plays a very important role in human capital formation for the following reasons:

1. An educated human can be considered an asset for the economy and not a liability.
2. Education can help an individual make better use of economic opportunities. It helps in enhancing the national income, cultural richness and increases the efficiency of the Government.
3. It enhances individual productivity in terms of quality and quantity.
4. Because being educated can help the economic status of an individual, it also develops the consciousness towards society.
5. An educated person is also aware of health and hygiene, and it will ultimately result in better health for the people of a country.

Health plays a very important role in human capital formation in the following ways:

1. If an individual is healthy, they may have better immunity to fight illness.
2. Being healthy will also increase the overall outcome of an individual.
3. The health of an individual is directly proportional to the work he does. Thus better health will increase efficiency.

The above-mentioned points prove that if better healthcare measures are taken up, and an individual in a country becomes more healthy, the human capital and productivity will also increase.

If an individual is healthy, then they may be able to give a better outcome in terms of their work lives. The efficiency of a healthy person is higher than that of an unhealthy person. A healthy person can spend more time working in comparison to an unhealthy person. Hence, health plays a very important role in an individual’s working life.

The various activities that come under the primary, secondary and tertiary sectors are as follows:

The activities that add value to the national income are called economic activities. They can be divided into two types: market activities and non-market activities. Market activities involve the activities performed for pay or profit, and non-market activities include the production done for self-consumption.

The activities that add no value to the national income are called non-economic activities. Domestic chore is an example of non-economic activities.

The wage distribution among men and women has been a major concern for society. Women are mostly paid less than men, and one major reason for this is the meagre education qualification of women. They are employed in sectors which do not provide them with proper maternity leaves, childcare benefits and other provisions and are also responsible for managing the household work. Hence, they are paid less than men. Skill is another reason why wages for women are less than for men. Men are considered more skilful in comparison to women, despite equal physical work. Due to these reasons, women are employed in low paid work.

A situation in which skilled and abled people do not get gainful work at a decent wage is called unemployment. Both rural and urban areas have unemployment. In the case of the rural population, there is seasonal unemployment, and in urban areas, there is educated unemployment.

Rural areas have cases of both seasonal and disguised unemployment. Seasonal unemployment is when a person is unable to find a job during a few months of the year. This mostly happens for farmers who are unemployed for a part of the year when no crops are grown.

Disguised unemployment is when people appear to be employed. When the number of people working on agricultural land is higher than the number of people actually required to work, this is considered an example of disguised unemployment. If a piece of land requires only three people to work on it, but rather five are working on it, the two extra people are an example of disguised unemployment.