the concept of human capital is used by economists to refer to the skills, knowledge, and experience held by individuals that increase their productivity in the labor market. human capital is formed through investments in education, training, and other forms of learning, and can be viewed as an asset for both individuals and society as a whole. when an individual invests in developing their human capital, it can lead to higher wages and a greater overall economic contribution, both to them and to the economy as a whole.