Population, Education, and Human Capital
The most malleable factor of production available to any economy is its population. It is not stretching the truth to say that an economy’s labor force is its most significant resource endowment, and it is one that can be made more productive over time. Our earlier discussion (Chapters 8, 9, and 10) has highlighted the importance of an educated labor force to economic growth. A better-educated and-trained labor force increases what economists call “human capital,” or “knowledge capital.” Education is the means by which a nation is able to appropriate from and share in the gains arising from technological and knowledge advances at the world level.