What is the primary assumption of human capital theory?

Human capital theory is based on the idea that individuals can enhance their economic value through education and skill development. The primary assumption posits that education improves a person's productivity and economic capacity, allowing them to contribute more effectively to the workforce. This improvement in skills and knowledge translates into better job performance, increased innovation, and higher wages, which benefits both individuals and the economy as a whole.

By investing in education, individuals not only enhance their own capabilities but also contribute to the overall growth and efficiency of various industries. This perspective underscores the significance of education as a vital asset in developing a skilled workforce that meets the demands of an evolving job market.