Chapter 2 - People as Resource

Chapter 2 – People as Resource is an effort to explain the population as an asset for the economy rather than a liability. Population becomes human capital when there is an investment made in the form of education, training, and medical care. Human capital is the stock of skill and productive knowledge embodied in them. Here, we have provided Vidyakul CBSE Class 9 Economics notes for Chapter 2 to help students grasp concepts quickly and revise thoroughly before the exams. These Vidyakul Economics notes for Class 9 have been designed precisely covering almost all the concepts mentioned in the chapter. Preparing from these notes will help students to fetch excellent marks in their Class 9 Economics exam.

Overview

People as Resource is a way of referring to a country’s working people in terms of their existing productive skills and abilities. Like other resources, the population is also considered a human resource. When the existing ‘human resource’ is further developed by becoming more educated and healthy, it is called human capital formation. Investment in human capital (through education, training, and medical care) yields a return just like an investment in physical capital.

Human capital is superior to other resources like land and physical capital. Total productivity adds to the growth of the economy. Investment in human resources (via education and medical care) can give high rates of return in the future. Countries, like Japan, have invested in human resources.

Economic Activities by Men and Women

The activities in Economics are divided into three sectors i.e. primary, secondary, and tertiary. The primary sector includes agriculture, forestry, animal husbandry, fishing, poultry farming, mining, and quarrying. The secondary sector includes manufacturing. The tertiary sector includes trade, transport, communication, banking, education, health, tourism, services, insurance, etc. These activities are termed economic activities. Economic activities have two parts — market activities and non-market activities. Market activities involve remuneration to anyone who performs i.e., activity performed for pay or profit. These include the production of goods or services, including government services. Non-market activities are the production for self-consumption. These can be the consumption and processing of primary products and the own-account production of fixed assets.

There was a division of labor between men and women. Men were paid for their services but to the contrary women were not paid for their services. Education played an important role in individuals making better use of economic opportunities. Most women used to work in places where there was no job security. In this sector, employment was characterized by irregular and low income. Basic facilities were missing like maternity leave, childcare, and other social security systems. However, women with high education and skill formation were paid highly.

Quality of Population

The quality of the population depends upon the literacy rate, and health of a person indicated by life expectancy and skill formation acquired by the people of the country. It ultimately decides the growth rate of the country and a literate and healthy population were an asset.

Education

Education contributes to the growth of society and enhances the national income, and cultural richness, and increases the efficiency of governance. Literacy is needed for citizens to perform their duties and enjoy their rights properly. Sarva Siksha Abhiyan, which was introduced in the year 2010 provides elementary education to all children in the age group of 6–14 years. To encourage attendance and retention of children and improve their nutritional status, a mid-day meal scheme was introduced. The 12th plan focused on increasing access, quality, adoption of state-specific curriculum modification, vocationalisation, and networking on the use of information technology, distance education, and convergence of formal, non-formal, distance, and IT education institutions.

Health

Improvement in the health status of the population has been the priority of the country. The National Policy, too, aimed at improving the accessibility of healthcare, family welfare, and nutritional service, especially for the underprivileged segment of the population. India over the last five decades has developed its manpower required in the primary, secondary, and tertiary sectors.

Unemployment

In India, we have unemployment in rural and urban areas, though the nature of unemployment differs in rural and urban areas. In rural areas, unemployment was seasonal and disguised. In urban areas, unemployment was educated unemployment. Seasonal unemployment occurred when people were not able to find jobs during a few particular months of the year. In disguised unemployment people appeared to be employed. Educated unemployment became a common phenomenon in urban areas. Unemployment leads to the wastage of manpower resources, tends to increase economic overload, and has a detrimental impact on the overall growth of an economy. In India, statistically, the unemployment rate is low.

In the primary sector, the employment structure is characterized by self-employment. Agriculture is the most labor-absorbing sector of the economy. But, in recent years, there has been a decline in the dependence of the population on agriculture. Some of the surplus labor in agriculture has moved to either the secondary or the tertiary sector. In the secondary sector, small-scale manufacturing was the most labor-absorbing. In the case of the tertiary sector, various new services are now appearing like Biotechnology, Information Technology, and so on.

Exercise

1. What do you understand by ‘people as a resource’?

Answer: ‘People as a resource’ is a term that means how the population can be an asset and not a liability. It is a way of referring to the working class of society in terms of their existing productive skills and abilities. The population becomes human capital when an investment is made in the form of education and training. Education and health also help human beings to be an asset to the economy. Thus, people as a resource refers to the working population that results in the development of society.

2. How are human resources different from other resources like land and physical Capital?

Answer: Human resources are different from other resources like land and physical capital because human beings can use other resources to give out productive output. However, resources like land and physical capital are dependent on human resources for their use and cannot give any productive output all by themselves.

3. What is the role of education in human capital formation?

Answer: Education plays a very important role in human capital formation for the following reasons:

An educated human can be considered an asset for the economy and not a liability.

Education can help an individual make better use of economic opportunities. It helps in enhancing the national income, and cultural richness and increases the efficiency of the Government.

It enhances individual productivity in terms of quality and quantity.

Because being educated can help the economic status of an individual, it also develops the consciousness towards society.

An educated person is also aware of health and hygiene, and it will ultimately result in better health for the people of a country.

4. What is the role of health in human capital formation?

Answer: Health plays a very important role in human capital formation in the following ways:

1. If an individual is healthy, they may have better immunity to fight illness.
2. Being healthy will also increase the overall outcome of an individual.
3. The health of an individual is directly proportional to the work he does. Thus better health will increase efficiency.

The above-mentioned points prove that if better healthcare measures are taken up, and an individual in a country becomes more healthy, the human capital and productivity will also increase.

5. What part does health play in the individual’s working life?

Answer: If an individual is healthy, then they may be able to give a better outcome in terms of their work lives. The efficiency of a healthy person is higher than that of an unhealthy person. A healthy person can spend more time working in comparison to an unhealthy person. Hence, health plays a very important role in an individual’s working life.

6. What are the various activities undertaken in the primary, secondary, and tertiary sectors?

Answer: The various activities that come under the primary, secondary, and tertiary sectors are as follows:

7. What is the difference between economic activities and non-economic activities?

Answer: The activities that add value to the national income are called economic activities. They can be divided into two types: market activities and non-market activities. Market activities involve the activities performed for pay or profit, and non-market activities include the production done for self-consumption.

The activities that add no value to the national income are called non-economic activities. The domestic chore is an example of non-economic activities.

8. Why are women employed in low-paid work?

Answer: The wage distribution among men and women has been a major concern for society. Women are mostly paid less than men, and one major reason for this is the meager education qualification of women. They are employed in sectors that do not provide them with proper maternity leaves, childcare benefits, and other provisions and are also responsible for managing household work. Hence, they are paid less than men. Skill is another reason why wages for women are less than for men. Men are considered more skillful in comparison to women, despite equal physical work. Due to these reasons, women are employed in low-paid work.

9. How will you explain the term unemployment?

Answer: A situation in which skilled and abled people do not get gainful work at a decent wage is called unemployment. Both rural and urban areas have unemployment. In the case of the rural population, there is seasonal unemployment, and in urban areas, there is educated unemployment.

10. What is the difference between disguised unemployment and seasonal unemployment?

Answer: Rural areas have cases of both seasonal and disguised unemployment. Seasonal unemployment is when a person is unable to find a job for a few months of the year. This mostly happens for farmers who are unemployed for a part of the year when no crops are grown.

Disguised unemployment is when people appear to be employed. When the number of people working on agricultural land is higher than the number of people actually required to work, this is considered an example of disguised unemployment. If a piece of land requires only three people to work on it, but rather than five working on it, the two extra people are an example of disguised unemployment.

11. Why is educated unemployed a peculiar problem in India?

Answer: Educated unemployment has become a common phenomenon in India. Youths with matriculation, graduation, and post-graduation degrees are unable to get jobs in India. This is because the education system in India labels anyone above the age of 18 years as eligible to work. This leaves the youth unskilled and ultimately unemployed. It is important that an individual who does not only have a degree but must also be skilled enough to get a job.

12. In which field do you think India can build the maximum employment opportunity?

Answer: There are three types of activities into which the employment sector is divided: the primary sector, secondary sector, and tertiary sector. The largest part of India’s population is dependent on agriculture for their livelihood, yet there is a massive scope of disguised unemployment in the agricultural sector. Hence the manufacturing sector, a secondary activity, is the one where the maximum part of the population can be given employment due to the increase in the number of industries.

13. Can you suggest some measures in the education system to mitigate the problem of the educated unemployed?

Answer: Some measures that can be taken in the education system to mitigate the problem of educated unemployed are as follows:

1. Make secondary-level education more career-oriented. This practice will not just help individuals get an education but also enhance their skills and get better employment opportunities.
2. An individual should be able to choose the subjects that suit his or her abilities.
3. New subjects and fields of study should be introduced at the school level, which can be opted for a career in the future. This will open an opportunity for students to plan their future options at the school level itself.

14. Can you imagine some village that initially had no job opportunities but later came up with many?

Answer: Students must answer this question based on their own experience.

15. Which capital would you consider the best — land, labor, physical capital, or human capital? Why?

Answer: Human capital can be considered to be the best out of the land, labor, physical, and human capital. This is because the other resources cannot be used all by themselves, and only humans can use other resources and get productive outcomes from them.

Frequently Asked Questions......

What is a ‘Resource’?

Resources are anything that has utility and adds value to our life.

What are the reasons for Unemployment?

1. Discrimination 2. Slow industrial growth 3. Decreased economic growth

What is ‘Sarva Siksha Abhiyan’?

Sarva Shiksha Abhiyan (SSA) is the Government of India’s flagship program for the achievement of Universalization of Elementary Education (UEE) in a time-bound manner, as mandated by the 86th amendment to the Constitution of India for children of age 6 -14 years.