FINANCIAL INVESTMENTS EFFICIENCY IN HUMAN CAPITAL

ABSTRACT

The essence of human capital is considered in the work and a literature review is conducted on the issue of identifying factors for increasing human capital. The key indicators of financial investments in human capital in the Russian Federation are analyzed.

Keywords: human capital, financial investments in human capital, investments in education, investments in healthcare.

An analysis of factors influencing the development of human capital has been the subject of a fairly large number of studies in both domestic and foreign literature. L.P. Bakumenko considers significant factors of human capital in the most developed countries of the world by means of the method of factor analysis - the method of principal components. He came to the conclusion that the main factors of human capital in the these countries are people’s satisfaction with social conditions, the level of education and demographic challenges [1].

In order to determine the impact of financial investments in human capital on the development of human potential in the analyzed countries and draw conclusions about the effectiveness of these investments, we will analyze the data on the human development index.

The human development index for the group of analyzed countries averages 0.811, which is a fairly high indicator. The highest level of development of cooperation with the public in 2015 is observed in Greece (0.866), while the lowest is in Turkey (0.783). According to the analysis of financial investments in human capital in three key areas, over the period we examined in Greece, there were high rates of R&D expenditures and healthcare costs among the objects of this study. While Turkey’s investment in human capital in all three areas is significantly lower than the average for the group of analyzed countries. Figure 1 shows the distribution of research objects by the index of human development in 2015.

Picture 1. Rating of countries according to the Human Development Index, 2015

If we look at the dynamics of the indicator in Russia for the period from 2005 to 2015, we can state a tendency towards a permanent increase in the level of human development of the country. In 2015, the indicator reached its maximum level (0.813) for the analyzed period. According to the results of 2015, the level of human development had increased by 8% compared to the results of 2005.

In general, the dynamics of indicators of financial investments in human capital and the dynamics of the indicator of the human development index for our country for the period we have examined do not coincide [3].

Let us analyze financial investments in human capital in Russia in more details (Figure 2).

According to the data, all four areas of investment in human capital have an upward trend line. Between 2006 and 2018, the level of spending on education grew 3.5 times, on health care - 3.8 times, on culture - 3.5 times, on social policy - 5 times. The largest share in total financial investments in human capital is spent on social policy, the smallest - on culture.

The main recommendations for increasing the HDI in a country based on the acquired results are follows:

• to increase government financial investment into healthcare and education spheres, especially into development researches;
• to raise the number of teachers due to the growing need for them in the framework of public school education;
• to expand access to the Internet, as well as to other innovative technologies in the era of active development of the digital economy.

References:

1. Baumenko, L. P. Statistical aspects of researching the quality of population life: monography/ L. P. Baumenko. – Yoshkar-Ola: Mari State Technical University, 2011.)
2. Determinants of human capital [electronic resource] // URL: https://www.diva-portal.org/smash/get/diva2:819462/FULLTEXT01.pdf (date of the application: 16.05.2019).
3. World Bank Open Data [electronic resource] // URL: https://data.worldbank.org (date of the application: 16.05.2019).