which must be used as a form of capital for its economic development. The population of a country is formed into human capital through the process of education, and through the replacement of human labor by technology, in order to free human labor for higher uses.
In order to form a population into human capital, however, resources must be allocated to the task.7 For all countries, and particularly for developing countries, the allocation of resources to the development of human capital means that some other sector of the economy or of the society will be deprived, to some extent, in the short run. In most instances, it is the informal sector of the economy which is deprived the locus of most micro enterprise activity in a non industrial country. In the long run, of course, all other factors remaining equal, the economy of the country will ultimately benefit from the formation of a population into human capital.
The development of a population into human capital, however, does not mean that a country will be capable
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