What does the term human capital refer to?

Human capital is the term economists use to refer to the skills and knowledge held by a group of individuals, which can be an asset or a liability for an economy. When a person learns a valuable skill, has a unique talent, or holds particular values, that has economic value. This is considered human capital.

Examples of this might be medical knowledge, knowing how to fix cars, or the ability to play an instrument. This value cannot be taken away like possessions or resources can, and nations that invested in human capital often succeed in other areas.

The transfer of knowledge can be achieved without losing knowledge. Therefore, Human capital is unique since it can be increased and duplicated like no other resource. Human capital is a very important investment for any economy. Just by knowing this, you have just increased your human capital!