Human capital and economic growth reinforce each other .elaborate this statement with example.

Human capital and economic growth go parallel ways in the process of development of the economy. When the economy of a country grows, it helps in accelerating the human capital formation and vice-versa. This is due to the reason that an increase in number of skilled and qualified people in an economy results in an increase in productivity of the economy i.e it allows the economy to producer higher quantities of goods and services with the same resources. Now, when the economy gets endowed with more of the resources i.e goods and services, it can reinvest the proceeds of their sale in further formation of human capital by enhancing the skill sets of existing workforce and adding more people to the skilled workforce. This is a recurring process and a positive change in any one of the human capital or economic growth of an economy leads to a positive change in the other variable.

For example, suppose an economy has 100 people in its skilled workforce. Now, if this workforce further increases to 150, the productivity and income of the people will increase. An increase in individual incomes of the people will lead to an increase in the GDP of the economy and accelerate the economic growth of the economy in the first round.

in the second round, this increase in individual incomes of the people will allow them to reinvest on their skills and this, in turn will lead to further economic growth in the long run. This process will continue and, this is the reason that human growth and economic growth reinforce each other.

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