Establish the need for acquiring information relating to health and education expenditure for the effective utilisation of human resources.
People spend to acquire information relating to the labour market and other markets like education and health. This information is necessary to make decisions regarding investments in human capital as well as for the efficient utilisation of the acquired human capital stock.
Individuals need to know whether educational institutions provide the right type of employable skills and at what cost, in order to increase their future income. Similarly, information regarding health is crucial because a sick labourer without access to medical facilities is compelled to abstain from work, leading to a loss of productivity.
Therefore, acquiring information relating to health and education expenditure helps in making informed decisions for the effective utilisation of human resources. Expenditure incurred for acquiring such information is also a source of human capital formation.
Explanation
The textbook explains that acquiring information about education and health markets is essential for making decisions on human capital investment and efficiently utilising the existing human capital stock. Knowing about employable skills and medical facilities prevents loss of productivity and ensures better future income.