The correct option is 2 and 3 only.
Explanation
Human Capital Formation refers to the process of adding to the stock of skilled and capable people in the country. While education and health are the primary sources, other sources include on-the-job training, migration, and expenditure on information.
Statement 1 is Incorrect: People do spend money to acquire information relating to the labour market and other markets. This includes expenses incurred to find out about job opportunities, salary structures, and educational institutions. This expenditure is treated as a source of human capital formation because it enables individuals to actualize their productive potential.
Statement 2 is Correct: Information is essential for making rational decisions regarding investments in human capital. Individuals need accurate data on the costs of education and the expected returns (future earnings) to decide where and how much to invest in skill development.
Statement 3 is Correct: The efficient utilization of the acquired human capital stock depends on the availability of market information. Even if an individual possesses high skills, without information regarding where those skills are in demand, the human capital cannot be utilized effectively to generate economic value.
Key Takeaway: Expenditure on information is a critical determinant of human capital formation, as it bridges the gap between the acquisition of skills and their deployment in the labour market.