Social infrastructure development: progress and problems

Social infrastructure development or investments in human capital are much more difficult to define, analyze and measure than the development of physical infrastructure or investments in physical capital. The recent revival of interest in human capital owes its origin to the empirical finding that physical capital stock was not the main determinant of growth in an economy. The discovery, originally made by Solow and empirically verified by many others, that the neoclassical production function left a large unexplained residual when capital-intensity was used as an explanatory variable, has led to a continuing search to explain the “residual factor”. Investment in education and skill formation has been extensively used as the primary variable to explain the residual. However, other elements of human capital formation, especially health and nutrition have also received attention as factors contributing, directly or indirectly, to growth.

Sustainable Development Goals:

Decent Work and Economic Growth

Reduced Inequalities