Question

How does the separability of human capital from its owner compare with that of physical capital?

Options

• Physical capital is separable from its owner, while human capital is inseparable from its owner

• Both are separable from their owners

• Physical capital is inseparable from its owner, while human capital is separable from its owner

• Both are inseparable from their owners

Answer 1

Physical capital can be separated from its owner—a machine can be sold to someone else. Human capital, being embodied in the person through education, health, and training, is inseparable from its owner.