NAGA COLLEGE FOUNDATION, INC.

CITY OF NAGA
COLLEGE OF TEACHER EDUCATION

HUMAN RESOURCES MANAGEMENT

HUMAN CAPITAL THEORY
LECTURE GUIDE

DEFINITION OF HUMAN CAPITAL THEORY RUNNING TIME 5 Minutes

LECTURE The human capital theory posits that human beings can increase their productive
LECTURERS Rollano & Malazarte
capacity through greater education and skills training.

PPT SLIDE PRESENTATION CONTENT RECOMMENDED EXPLANATION

It states that companies have an incentive to seek
productive human capital and to add to the human capital The human capital theory posits that human beings can increase their productive
capacity through greater education and skills training.
2 of their existing employees. Hence, human capital is the
concept that recognizes labor capital is not homogeneous.
Note: Homogenoues = magkakatulad / similar
LECTURER Rollano, Princes Dianne

In short, human capital theorists argue that an educated population is a productive

Human capital theory rests on the assumption that
population. Human capital theory emphasizes how education increases the
formal education is highly is highly instrumental and
productivity and efficiency of workers by increasing the level of cognitive stock of
necessary to improve the productive capacity of a
3 population.
economically productive human capability, which is a product of innate abilities and
investment in human beings. The provision of formal education is seen as an
investment in human capital, which proponents of the theory have considered as
LECTURER Rollano, Princes Dianne
equally or even more worthwhile than that of physical capital.
 Knowledge
 Skills
Human capital puts a monetary value on the knowledge, skills, competencies, and

4
 Competencies
attributes of a person. All of these factors enable individuals to work, and
 Attributes
therefore produce something of economic value.
LECTURER Malazarte, Mercy
 PROPONENTS OF HUMAN CAPITAL THEORY RUNNING TIME 5 Minutes
LECTURE
This section will provide historical foundations of human capital theory. LECTURERS Sopeña & Rodriguez

PPT SLIDE PRESENTATION CONTENT RECOMMENDED EXPLANATION

Gary Becker and Theodore Schultz In the 1960s, economists Gary Becker and Theodore Schultz pointed out that education

5 and training were investments that could add to productivity. As the world accumulated
more and more physical capital, the opportunity cost of going to school declined.
LECTURER Sopeña, Maria Veronica

Many theories explicitly connect investment in human capital development to education,

and the role of human capital in economic development, productivity growth, and
innovation has frequently been cited as a justification for government subsidies for
Intellectual Capital and Human Capital
education and job skills training. Education became an increasingly important component
6 of the workforce. The term was also adopted by corporate finance and became part
of intellectual capital, and more broadly as human capital. Intellectual and human capital
are treated as renewable sources of productivity. Organizations try to cultivate these
LECTURER Rodriguez, Angela sources, hoping for added innovation or creativity. Sometimes, a business problem
requires more than just new machines or more money.

COMPONENTS OF HUMAN CAPITAL THEORY RUNNING TIME 5 Minutes

LECTURE Today, most theories attempt to break down human capital into one or more Manga, Verdadero
components for analysis.
LECTURERS
& Responde

PPT SLIDE PRESENTATION CONTENT RECOMMENDED EXPLANATION

Human capital in a broad sense is a collection of activities – all the knowledge, skills, abilities, experience, intelligence, training and competences
possessed individually and collectively by individuals in a population. These resources are the total capacity of the people that represents a form

7 of wealth that can be directed to accomplish the goals of the nation or state or a portion thereof.

LECTURER Manga, Angelica

 Emotional Capital Most commonly, Emotional capital is the set of resources (the personal and social emotional
competencies) that is inherent to the person, useful for personal, professional and organizational
LECTURER Verdadero, Aileen development, and participates to social cohesion and has personal, economic and social returns

Social Capital Social capital, the sum of social bonds and relationships, has come to be recognized, along with
many synonyms such as goodwill or brand value or social cohesion or social resilience and related
8 LECTURER Responde, John Paul
concepts. It is what is the result of the networks of relationship between individuals,
communities, and the ties that bind them in the broader society.

Knowledge Capital Many theories explicitly connect investment in human capital development to education, and the
role of human capital in economic development, productivity growth, and innovation has
frequently been cited as a justification for government subsidies for education and job skills
LECTURER Responde, John Paul
training.

LECTUR THEORETICAL FRAMEWORK: HUMAN CAPITAL THEORY RUNNING TIME 5 Minutes

E (No definite theoretical paradigm yet) LECTURER Nobleza

PPT SLIDE PRESENTATION CONTENT RECOMMENDED EXPLANATION

FOR RESEARCH

9 Under Maintenance

FOR RESEARCH

FOR RESEARCH
 HUMAN CAPITAL THEORY IN PHILIPPINE CONTEXT RUNNING TIME 5 Minutes

LECTUR Education has always been on top of the priorities in every Filipino household. For the poor,

E education is a basic tool to liberate them from poverty, ignorance, illiteracy, fear and other
social economic circumstances that prevent or hinder the full development of human
LECTURERS Pastor, Pato, & Nobleza
personality. “Prevention is better than cure”

PPT SLIDE PRESENTATION CONTENT RECOMMENDED EXPLANATION

Education is the top priority in national budget concerns (includes DepEd, SUCs, CHED, and TESDA). In
2021 budget, Department of Education was allocated with PhP751.7 billion of funds. Government
offers free public elementary and secondary formal education, TESDA or skill trainings,
scholarships, free tertiary education in state universities and colleges, etc. In CHED, these include
Legal Basis
the Ladderized Education Program, Expanded Tertiary Education Equivalency and Accreditation
Article XIV, Section 5 (5) of the 1987
Program, Free Medical Education, Tulong-Dunong Program, Payapa at Maganang Pamayanan and
Constitution expressly provides that:
Education Assistance Programs.
"The State shall assign the highest
budgetary priority to education and
10 - 12 attract and retain its rightful share of
LECTURER Pastor, Niño Jesus

the best available talents through

Education gives people hope, confidence and dignity. It equips them with knowledge and skills to
adequate remuneration and other
escape poverty. It saves lives and reduces the spread of preventable diseases. A population that
means of job satisfaction and
is better educated has less unemployment, reduced dependence on public assistance programs,
fulfillment."
and greater tax revenue. Education also plays a key role in the reduction of crime, improved public
health, and greater political and civic engagement.

LECTURER Pato, Shannen Mae

Education plays a great and significant role in the economy of a nation; thus, educational expenditures are found to constitute a form of investment. This
augments individuals’ human capital and leads to greater output for society and enhanced earnings for the individual worker. It increases their chances of
employment in the labor market, and allows them to reap pecuniary and non-pecuniary returns and gives them opportunities for job mobility. Education is a source
of economic growth and development only if it is anti-traditional to the extent that it liberates, stimulates, and informs the individual and teaches him how and
why to make demands.

LECTURER Nobleza, Rodlin

REFERENCES Ross, S. (2021). What Is the Human Capital Theory and How Is It Used?. Investopedia. Retrieved October 25 2021 from
https://www.investopedia.com/ask/answers/032715/what-human-capital-and-how-it-used.asp.
Almendarez, L. (2010). Human Capital Theory: Implications for Educational Development. Retrieved October 25 2021 from
https://www.open.uwi.edu/sites/default/files/bnccde/belize/conference/papers2010/almendarez.html.
Gary S. Becker (1993). Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education (3rd ed.). University of Chicago
Press. ISBN 978-0-226-04120-9.