Question

What are some fiscal policies for improving a society’s human capital?

Short answer

Education and scientific research expenditures increase human capital in the form of worker productivity.

Step-by-step solution

Definition

Fiscal policy:

According to political science and economics, is defined as the activities taken by the government in order to influence the economy in a favorable way. To produce a sustainable and stable economy, such activities include adjusting government expenditure and influencing tax and interest rates to regulate macroeconomic circumstances such as unemployment, inflation, prices, and aggregate demand. Furthermore, fiscal policies are implemented in accordance with the current economic circumstances.

Explanation

Education and scientific research expenditures increase human capital in the form of worker productivity. Human capital can be improved through training and skill development. Government should focus spending on vocational training for workers. Improvment in healthcare also contributes to improved human capital.