On the Dimensions of Human Capital: An Analytic Framework
Human capital is becoming increasingly important in today's knowledge-based economy. However, existing definitions of human capital are too narrow to capture fully the implications of public policy on human capital formation and utilization. This paper proposes a broad definition of human capital which includes four dimensions of human capital: (a) potential, (b) acquisition, (c) availability, and (d) effectiveness. It discusses various policies that can affect human capital within this framework. It shows that the broader definition can help identify links through which human capital moves from one stage to another; and develop a research agenda that takes a comprehensive look at the impact of different policies on human capital.