Outcomes and Benefits of Human Capital

This chapter focused the discussion on the various benefits of human capital to individual persons and groups. The outcomes of human capital have been presented through the multidisciplinary lenses of human resource (HR) management, strategy and strategic management, and economics. Human capital increases wages and earning potentials of individuals and increases the performance of business firms and all forms of organizations. In formal organizations, HR practices constitute a form of institutions that guide the management of people with human capital to ensure that the knowledge, skills, abilities, and other characteristics they possess are utilized for the optimum productivity of their organizations. Societies also benefit from the accumulation of human capital by persons. Although human capital outcomes are sometimes direct, they are more complex in societies simply because societies are multifaceted. This chapter concludes with the “micro–macro paradox” on the returns to human capital and introduces the Human Capital Returns Matrix.