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What Are the Different Types of Human Capital Investments?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 04 September 2016
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When talking about human capital investments, usually education first comes to mind; however, human capital investments go beyond mere education to include other facets of human development. Generally, human capital development or investments refer to the various input for human beings who serve the purpose of increasing their value as employees, citizens and people. To this end, human capital investments include such factors as the impartation of skills, formal and informal types of education, health considerations and good morals.

Education is one of the more talked about types of human capital investment due to the fact that educated people are considered valuable additions to both the society and the work place by virtue of the educational capital within them that can help further develop a business, the general society and the economy at large. As such, most governments make it a priority to invest in the education of their citizens through the provision of subsidized education, scholarships, grants and excellent educational infrastructure. Companies also contribute to educational human capital investments through sending their employees on company-sponsored trainings, further education, seminars and other types of educational and training pursuits aimed at improving the human capital of such employees.

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In the same way, companies and governments also contribute to human capital investments through the provision of good health facilities or through enabling access to the providers of competent healthcare. Companies do this by providing insurance to employees, while governments do this by providing the necessary medical infrastructure, including aspects like good hospitals and the provision of subsidized healthcare programs so that healthcare can be made accessible to the less wealthy members of the society. The importance of this type of human capital investment is related to the fact that the healthier the individual is the more productive that individual will be.

The consideration of good morals as a part of human capital investments stems from the fact that individuals with good morals are able to fit in better in the society, lessening the burden on the government and other members of the society in terms of crimes and the provision of security to deal with such issues. For companies, employees with good morals are better able to implement corporate ethics and are less liable do something contrary to the corporate ethics of the company. This practice of good morals is also carried into the family life, consequently affecting the society in a positive manner.

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