In a simple model of production, the inputs of capital (such as machinery) and labour (hours of work), along with land and enterprise, are converted into output through some production function. However, in this simple model of production it is possible to overlook the human capital that is also employed.
If you have a workforce with high levels of training and experience, then you might expect that workforce to produce a higher value of output than a less experienced, or lower-trained workforce. The intangible input that creates this increased value, created by the knowledge, skills and experience of the worker, is known as the level of human capital employed.
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