Economics Help?????????????

R

Rinoa

New member
Please help me answer this question, I have NO idea on how to go about answering this:

Is human capital (H) substitutable, complementary, or both with labour (L)? Explain. Hint: Think of the impact for a single firm making the entire economy’s output run by a central planner.

I got answers to this before that said that human capital & labour are the same thing but in the question the function is:
Y = A*K^α*L^(1−α)/2*H^(1−α)/2 ; L is the # of workers employed & H is the level of human capital which equals the # of post-secondary degrees held by workers

Thank you.
 
Labor and human capital are not the same thing. Labor is a factor of production, the number of persons is counted in the production function. Human capital means labor plus education or skills. In developing country, most of the labor supply is labor capital due to a lack of skills and education. But in the US, Canada, Europe and Japan, human capital is important. It will lead also to innovation and new products as well as an increase in productivity.
 
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