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FEM 4204

FEM 4204. HUMAN CAPITAL AND THE ECONOMY. Nama Pensyarah : Prof Madya Dr . Sharifah Azizah Haron Jabatan Pengurusan Sumber dan Pengajian Penguna , Fakulti Ekologi Manusia , UPM E-mail: sh.azizah@putra.upm.edu.my s harifah_haron@yahoo.com Ph : 03-8946-7108 Hp: 012-370-5098

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FEM 4204

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  1. FEM 4204 HUMAN CAPITAL AND THE ECONOMY

  2. NamaPensyarah: Prof Madya Dr. SharifahAzizahHaron JabatanPengurusanSumberdanPengajianPenguna, FakultiEkologiManusia, UPM E-mail: sh.azizah@putra.upm.edu.my sharifah_haron@yahoo.com Ph: 03-8946-7108 Hp:012-370-5098 Faks: 03-8943-6157/ 8946-7108

  3. PenilaianKursus: Ujian 1 : 30% Tugasan : 30% PeperiksaanAkhir : 40% • Peperiksaan : • Ujian 1: • Topik 1 HINGGA Topik4 • • SoalanSubjektifdanObjektif • PeperiksaanAkhir: • Topik 1 HINGGA Topik 8 • • Soalansubjektifdanobjektif

  4. Topic 1: INTRODUCTION

  5. Human Development Report, UNDP http://hdr.undp.org/hd Human Development Report 1990, UNDP http://hdr.undp.org/reports/global/1990 Anand, S. and Sen, A. K (199) Human Development Index: Methodology and Measurement, Human Development Report Office Rahmah Ismail (1996) Modal Manusia dan Perolehan Buruh, Dewan Bahasa & Pustaka References:

  6. Labor ~ The human effort used in the production; Return to labor is wages Human Resources ~ Traditionally called labor (FOP), but unlike other commodity resources which are controlled by contract, human contribution goes beyond “labor” to a society and civilization. Thus, “human capital” has evolved to contain the complexities Human resource aka “firm specific human capital” Concepts

  7. Human capital ~ Thecharacteristic (e.g. knowledge, personality, skill etc) possessed by an employee that make him/her more productive aka Human wealth It is not transferable, but can be shared with others without preventing its use by the original holder Concepts…cont

  8. Definition: “Process of enlarging people’s choice and enhancing their capabilities in leading their lives…” Human Development

  9. Topic 2: The importance of developing human capital

  10. Asnarulkhadi, A.S (2003) Pengenalan Pembangunan Komuniti, Serdang, Selangor: Percetakan selaseh Begg, D., Fischer, S., and Dornbusch, R. (1987) Economics, McGraw Hill Rahmah Ismail (1996) Modal Manusia dan Perolehan Buruh, Dewan Bahasa & Pustaka References

  11. Wealth of a Nation “Ordinary people are the center of knowledge creations and innovations. Our people are truly our greatest resources and assets….people are the building block of all we do…Machine can be fixed, systems and policies may be revamped and organizations can be restructured. However, the success or failure of any endeavor is still largely dependent on the people (Tun Abdullah Ahmad Badawi)

  12. In short; The quality of the human capital in a particular country determine the nation’s econ growth & dev Why? Human capital mobilizes (i.e. operates, organize etc) other factors e.g. physical & raw material in prod process As such, it influences the nation’s productivity and economic competitiveness HK & economic dev

  13. In knowledge environment, where economic activities are taken one step further and that knowledge changes all the time, “wealth’ is determine by how you use your brain, and how fast you gain, manage and apply knowledge. THUS, “The present illiterate are those who cannot read and write, but the future illiterate will most likely be those who cannot learn, unlearn and relearn” HK & economic dev

  14. Consequently: Effective human development strategy must be implemented to sustain economic growth and development HK & economic dev

  15. Human capital ~ the abilities, behaviors and energies of workers is the chief engine of prosperity for most organization Organization involve in HRD to: Improved business results Gain competitive advantage Increase profit/financial performance Increase productivity Prevent obsolescence of skill at all level Preparation for higher level tasks HK and organizations

  16. Can increase individual/household income Producing “the right” (attitude, skills, personality etc) individuals/members – e.g. empowered, resilient and self reliant family, community, labors and citizens Upward mobility As a strategy to eradicate poverty HK & Households

  17. Topic 3 Human Capital Development in Malaysia

  18. Begg, D., Fischer, S., and Dornbusch, R. (1987) Economics, McGraw Hill Rahmah Ismail (1996) Modal ManusiadanPerolehanBuruh, DewanBahasa & Pustaka Millennium Development Goal (MDG) Tenth Malaysia Plan – 2011-2015 Ninth Malaysia Plan – 2006-2010 Eighth Malaysia Plan 2001-2005 Seventh Malaysia Plan 1995-2000 References

  19. Formal schooling OJT and experience Take time out from one’s market job or in household activity in order to learn how to do it better Health i.e spending time and money in maintaining and augmenting one’s health – e.g aerobic class, dental check ups, gdnutritions Migration -- in search of better job or different lifestyle One forsake the opportunity in one location in order to exploit those in another Having children and raising them in certain ways Provide economic security in old age Forms of HKI

  20. HK Dev Planning The Framework …. POPULATION DEMOGRAPHYSOCIAL Birth rate; Mortality rate; Family Planning Health; Nutrition; Poverty; urban dev LABOR EDUCATION Labor Force Preparation; Allocation; Use Employment Econ aspects (formal & informal) Non econ aspects Production capabilities; Per capita Income; Income distribution

  21. HR/Capital Planning & Dev • In short, the process of improving human capital: • Begin at the early stage of child development. How? • Through children’s nutrition intake and health • The process continue when the children obtain formal and informal education • When the children finished schooling, they receive training to improve their human capital.

  22. Topic 4 Human Capital Theory

  23. Begg, D., Fischer, S., and Dornbusch, R. (1987) Economics, McGraw Hill Bryant, W. K (1990) The Economic Organization of the Household, Cambridge Univ Press Rahmah Ismail (1996) Modal Manusia dan Perolehan Buruh, Dewan Bahasa & Pustaka References

  24. (Inter temporal choice) utility max The Economists:Schultz (1961) & Backer (1962) The Theory: Deals with individual utility maximization over time Choice between current vs. future consumption I.e. if Uc < Uf then, individual will forego current consumption Note:Forgone current consumption = direct cost(e.g. cost of schooling) + opportunity cost + other non monetary cost (emotional cost of leaving the family etc) of investment Human Capital Theory

  25. Depending on HH time preferences, HH will put aside a fraction of its current income as saving The question is – what form will the saving take? Bonds, stocks, buy a house or investing in oneself/family members? The theory says: Human capital can be added, built and produce return like other types of capital (i.e. financial capital) Human Capital Theory

  26. Consider an individual concerned only with monetary payoff to formal schooling S/he will only invest in added schooling if payoff of added schooling ≥ payoff of the alternative invest (e.g. stocks, bonds, saving accounts etc) at the going market interest rate of r. Human Capital Theory

  27. Selamat Berjaya

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