TOPIC INFO (UGC NET)
TOPIC INFO – UGC NET (Economics)
SUB-TOPIC INFO – Growth and Development Economics (UNIT 8)
CONTENT TYPE – Detailed Notes
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1. Introduction
2. Human Capital and Human Development
3. Health as a Component of Development
4. Education as a Component of Development
5. Gender and Development
6. Interlinkages and the Vicious/Virtuous Cycle
7. Institutional and Policy Framework in India
8. Conclusion
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Social Sector Development: Health, Education, Gender
UGC NET ECONOMICS
Growth and Development Economics (UNIT 8)
Introduction
Social sector development refers to public investment in human capital formation through health, education, nutrition, and gender empowerment, which together determine the quality of a nation’s labour force and its long-run growth potential. The social sector is distinguished from the economic (physical infrastructure) sector because its returns accrue not merely as private benefits to individuals but also as positive externalities to society at large. Economists since Adam Smith have recognized that the skill, dexterity, and judgement of a nation’s labour force is as much a form of capital as machinery or factories, but it was only with the work of Theodore Schultz, Gary Becker, and Jacob Mincer in the mid-twentieth century that this idea was formalised into the Human Capital Theory. This theory holds that expenditure on education and health is not consumption but investment, yielding a measurable rate of return analogous to physical capital, expressed as:
$$ NPV = \sum_{t=0}^{n} \frac{B_t – C_t}{(1+r)^t} $$
where \(B_t\) represents the stream of benefits (higher earnings, better health outcomes) and \(C_t\) the costs (tuition, foregone earnings, medical expenditure) discounted at rate (r).