Question

What are the long-term ramifications of investing heavily in human welfare at the expense of economic production?

Answer 1

These days financial investment in human resources in a company has actually ended up being a crucial topic of conversation. There are various models which state that financial investment in Human resources results in increasing go back to scale. Output can not increase beyond a certain level without financial investment in Human Resource well-being like education, training.

In the short run, purchasing financial production may lead to a high rate of growth. However investing constantly in increasing economic production or increasing the variety of factors of production will result in a state where the growth rate of output will become constant and will increase even more. To increase the development rate of output beyond this level, what makes a difference is a financial investment in education, training, health, skill advancement, etc of the employees. This is one of the significant points of difference between developed and less developed nations. Developed countries invest heavily in human well-being which causes increasing returns for them while absence of this investment in establishing countries causes lessening returns for them.