Question

What effect do school dropouts and child labour have on human capital formation in India?

Options

• They have no effect on human capital formation

• They enhance human capital formation

• They reduce human capital formation

• They increase the share of GDP spent on education to 6%

Answer 1

School dropouts and child labour reduce human capital formation, as children kept out of school fail to accumulate the education and skills that constitute human capital. This is why ensuring free and compulsory schooling for children aged 6–14 under the RTE Act, 2009 matters.