Definition and measurement of human capital. Human capital can be defined as the total amount of knowledge, skills and intelligence of the people of a country.
This investment (human capital) is carried out with the aim of obtaining a higher level of consumption in the future. Although the controversy over the treatment of human resources as human capital has not been resolved, some classical and neo-classical economists such as Adam Smith, Von Threnen, and Alfred Marshall agree that human capital consists of skills that are acquired through education and are useful to all members of society. These skills are the main force for economic growth.
Besides there are still differences of opinion regarding the concept of human capital, there are also differences of opinion regarding its measurement. According to Mary Jean Bowman, the difference of opinion originates on two things, namely, first, regarding the issue of whether capital (human capital) is a store or an input to production. Second, with regard to weighting. In this weighting, it can be seen that there are efforts to treat quantitative and qualitative measures in human capital units. However, there is no agreement regarding the treatment of quantitative measurements in human capital. An education measure embodied in the labor force can be used to convert quality into quantity. The components of education then become specific variables which can be compared with physical capital, and the size of the workforce in economic growth.
As a consequence, the capital unit is defined in a limited sense, namely in the labor force, which can be measured in several ways, including:
1. Number of school years
2. Efficiency-equivalence units
3. Base-year lifetime earned income
4. Approximations to base year real cost
5. Approximations to current real cost
There are several problems in measuring the formation of human capital according to the cost basis approach.
The measures for the formation of net capital encounter several difficulties, among others.
1. With regard to the complex problem of the relationship between consumption and investment.
2. Is concerned with how to treat unemployment in estimating the opportunity cost.
Human Resource Development
There are three kinds of resources, namely natural resources, human resources, and capital resources. What are discussed here is human resources whose emphasis is on human capital. ). The purpose of developing human resources is to improve their quality and use. This objective is briefly stated in the Budapest Statement and the Jakarta Plan of Action. There are two main aspects in human resource development, namely the micro aspect, namely those relating to personal development, and the macro aspect, which relates to facilities, facilities, and the climate relating to personal development.
These Development Efforts Are Carried Out Through Education and Training
Education and training is carried out with the intention of forming, preparing, fostering, and improving human (learners) abilities and their use. Since the development is carried out at the expense of market consumption during development and is aimed at obtaining a higher level of consumption in the future, this activity is essentially an investment, namely investment in human capital. So education and training have an important role, not only increasing knowledge, but also increasing work productivity. As human capital, the education referred to here is education that is taken after compulsory education.
Education and training can be done outside of school, including through on the job training, institutional training, apprenticeship training, and up-grading training. On the job training is given to those who are officially employees. There are two forms of training, namely in-service training and pre-service training. Institutional training is carried out through organization and system development as an integral part of the national education system. The implementation is usually carried out by universities. Technical level training and hand worker level training.
Then Apprenticeship Training
This training is given to those who will be appointed as employees / workers. Furthermore, upgrading training.
This training is carried out to increase knowledge
1. Improving the quality of education can be carried out by setting goals and standards of educational competence, namely through a national consensus between the government and all levels of society. The educational outcome standards may differ between schools and between regions resulting in national competency standards at the minimum, normal (mainstream) and superior standard levels.
2. Increasing the efficiency of education management leads to school-based education management, by giving wider trust to schools to optimize the available resources to achieve the expected educational goals.
3. Increasing the relevance of education leads to community-based education. Increased parental and community participation at the policy and operational levels through school committees or boards. This committee consists of the principal, senior teachers, parent representatives, community leaders and student representatives. The role of this committee includes planning, implementing, monitoring and evaluating school work programs.
4. Equitable education services lead to equitable education. This is related to the application of a fair and transparent education financing formula, efforts to equalize the quality of education with the existence of minimum competency standards and equal distribution of educational services for students at all levels of society.