Duca Ioana

Investment in Human Capital and its Impact on Labour Market

Considering the scientific, technological, ecological and managerial progress, the exigencies towards supply and demand on the labor market have substantially increased. The specific negotiations of this market focus on the quality, structure and creative capacity of labor resources. Reality shows that acquiring capital is associated with acquiring knowledge along the development of human personality in the new terms, in which knowledge increases, multiplies and diversifies through usage, becoming an inexhaustible resource for the social and economicdevelopment.The theory of human capital has a large audience at present, being used for the qualitative stimulation of mechanisms on the labor market, meaning that based on it the processes of salary differentiation, migration, searching jobs adequate to the individuals training level and aspirations are explained. The decision to invest in human capital considers the increased requirements towards the labor market demand and supply, being mainly based on a cost - benefit analysis, in which costs include both direct and indirect expenses, the later ones transformed into opportunity cost terms. These opportunity costs represent the incomes that could have been obtained by entering the labor market instead of continuing studies.The labor markets vectors adjust the total costs and earnings resulted from obtaining the educational human capital, while the individuals evaluate according to their personal criteria the opportunity to invest in education. The contemporary dynamism of the labor market requires not only the rational conceptual frame but also the accents of actions in the plan of economic process, having immediate effects upon the main strategic directions of economic development.For the entire mechanism specific to the labor market that is under permanent segmentation, a crucial role is played by the investment in human capital (that is - investment in the education of individuals). Thus, the main characteristic of the new knowledge based society is the increased role and functions of human capital, as an essential element of labor market.