What Is the Role of Health in Human Capital Formation?

by Maxwell Keith

Good health enables us to work efficiently and use our full potential. We also need to be healthy to contribute to our society and to our economy. Healthy people are productive and earn higher incomes. Investing in our health and education also yields high returns on investment. If we take care of our health, our children will also benefit from it. A healthy population is a valuable asset to society and it is a key part of forming human capital.

Human capital is the basis for economic development, and a strong and healthy workforce is crucial for this process. However, the burden of ill health is a massive problem for many countries, and public health systems often fall short of providing quality care. Private investors can address this problem by contributing to the development of quality healthcare infrastructure. This will help build a more productive workforce and an attractive business environment, which in turn will help a country’s economy grow.

Early childhood health plays a vital role in human capital formation, especially for children. Healthy children have educated parents who understand the importance of good health and education. In the case of Japan, the education and health of its people led to its rapid economic development. This country had very little resources, but it was able to develop through health education and effective utilization of resources.

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