With reference to ‘On-the-job training’ as a source of human capital, consider the following statements: 1. It may involve training workers within the firm or sending them for off-campus training. 2. Firms incur expenses on training as a charity without expecting returns. 3. Workers are often required to work for a specific period after training. Which of the statements given above is/are correct?

With reference to ‘On-the-job training’… - NCERT Class 11 Economics MCQ

NCERT Class 11 Economics — Chapter 5: Human Capital Formation in India

mcqmedium

With reference to ‘On-the-job training’ as a source of human capital, consider the following statements:

It may involve training workers within the firm or sending them for off-campus training.
Firms incur expenses on training as a charity without expecting returns.
Workers are often required to work for a specific period after training.

Which of the statements given above is/are correct?

NCERT textbook question

From NCERT Indian Economic Development · Page 61

Options

A1, 2 and 3
B2 only
C1 and 2 only
D1 and 3 only

Did you get this right?

Solution

The correct option is 1 and 3 only.

Explanation

On-the-job training is a significant source of human capital formation. It refers to the training provided to employees while they are engaged in productive work, aimed at enhancing their skills and efficiency to increase overall productivity.

Statement 1 is Correct
On-the-job training can take various forms. It may involve training workers within the firm itself under the supervision of a skilled worker, or it may involve sending workers for off-campus training to specialized institutions. Both methods are utilized to upgrade the technical skills of the workforce.

Statement 2 is Incorrect
Firms do not incur expenses on training as an act of charity. Instead, this expenditure is treated as an investment. Firms incur these costs with the expectation that the returns-in the form of increased labor productivity-will exceed the cost of the training.

Statement 3 is Correct
Since firms invest resources in training, they aim to recover these costs through the enhanced productivity of the worker. Consequently, workers are often required to sign a bond or contract agreeing to work for the firm for a specific period after the training is completed. This ensures the firm benefits from the investment made.

Key Takeaway:
On-the-job training is an economic investment in human capital designed to boost productivity; it is cost-intensive, and firms mitigate the risk of losing this investment by mandating a minimum service period.

Your note

More from Chapter 5: Human Capital Formation in India

With reference to the distinction between ‘Human Capital’ and ‘Human Development’, consider the following statements: 1. Human capital considers education and health as means to increase labour productivity. 2. Human development considers education and health as irrelevant to human well-being. 3. In the human capital perspective, investment in health is always productive regardless of output. Which of the statements given above is/are correct?

medium

Which of the following statements correctly describes the nature of benefits flowing from Human Capital compared to Physical Capital?

medium

With reference to 'On-the-job training', consider the following statements: 1. It is exclusively conducted in classroom settings outside the workplace. 2. It may take the form of off-campus training. 3. It may involve observing skilled workers to learn specific technical skills. Which of the statements given above is/are correct?

easy

Consider the following statements regarding the 'Convergence' of human capital and income: 1. There is a clear convergence of per capita real income between developed and developing countries. 2. There is convergence in human capital measures like education between developed and developing countries. Which of the statements given above is/are correct?

medium

With reference to the 'External Benefits' of human capital, consider the following statements: 1. A healthy person stops the spread of contagious diseases, benefiting society. 2. An educated person cannot contribute to the socio-economic progress of a nation. 3. Benefits from physical capital flow only to those who pay the price for the product. Which of the statements given above is/are correct?

medium

Keep practising Chapter 5: Human Capital Formation in India

Work through every question from this NCERT chapter.

Browse all NCERT Class 11 Economics chapters