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What is the difference between human and physical capital


difference between human and physical capital


Difference between human and physical capital

Human capital refers to a worker's abilities, education, ability, and other attributes that influence his or her productive capacity and earning potential.

Physical capital

  1. Presence of trade barriers lead to mobility restriction.
  2. Process of formation is economic and technical.
  3. Physical capital is separable from the owner.
  4. Possibility of trading physical capital in the market exists.
  5. Continuous use leads to depreciation.
  6. Financial statements are present.

Human capital

  1. Culture and nationality lead to mobility restriction.
  2. Process of formation is conscious and social process.
  3. Human capital is not separable
  4. Services rendered by the human capital can only be sold.
  5. Ageing leads to the depreciation but it can be minimized up to some extent.
  6. Financial statements are absent.


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