Health as an Investment

Abstract

A THEORY of human capital is in the process of formulation. The primary question is "What is the contribution of changes in the quality of people to economic growth?" The academic economists first raised the question after their research showed that production in developed economies had been increasing much faster than could be explained by inputs of physical capital and additions to the labor force. But the wide interest which the question has aroused indicates much more than academic curiosity. It reflects the desires and aspirations of people throughout the world-people anxious to add weight to their demands for action against disease and illiteracy by showing that such action is not only humanitarian, but will make a major contribution to economic growth as well. Though research on the return to investment in people is barely getting started, even the most tentative conclusions have been widely quoted. Preliminary indications that the rate of return on investment in people is high have been seized upon in a growing number of countries as justification for in-