What are the two major sources of human capital in a country?
The two major sources of human capital in a country are investment in education and investment in health.
Investment in education is considered one of the main sources of human capital. It converts human beings into human capital by enhancing their labour productivity. This acquired ability is an outcome of deliberate investment decisions with an expectation that it will increase future income sources and accelerate the development process.
Investment in health is another crucial source. A healthy person can provide an uninterrupted labour supply for a longer period of time. Health, along with education, increases a person's contribution to economic growth, making it an important factor for human capital formation.
Explanation
The textbook explicitly identifies investment in education and health as primary sources of human capital formation, alongside on-the-job training, migration, and information. Education enhances labour productivity and future income, while health ensures a longer, uninterrupted labour supply for economic growth.