Family Capital Essay

FAMILY CAPITAL
Human capital can be defined as the stock of knowledge and skill, embodied in an individual as a result of education, training, and experience that makes them more productive (Dugan, Dennis J., Leahy, William H. ,1973). Different people possess different skills and talents that give them the opportunity and the advantage to become rich to become more prosperous (Dugan, Dennis J., Leahy, William H., 1973). Previous studies related family involvement to the sustained competitive advantage of family business over nonfamily business and to value creation through generations of family. Families provide a unique work environment that encourages greater individual investment and devotion (Valentine, C. A., 1968). Family capital has negative or positive impact on individual investment productivity because families with surplus capital are likely to provide sufficient working capital which is the life-blood nerve centre of a business firm unlike individual investors from families without surplus capital. (Dugan, Dennis J., Leahy, William H., 1973). Generational Poverty can be defined as state whereby poor families become trapped in poverty for some generations because these families have either limited or no resources. This means that poverty-stricken individuals experience disadvantages as a result of their poverty, which in turn increases their poverty and therefore the poor remain poor throughout their lives (Valentine, C. A., 1968). Not unless there is government intervention like provision of investment incentives and tax reduction on poor people, the cycle will continue (Besley, T., S. Coate, and G. Loury., 1993). Free market would have no impact on generational poverty because poor people will have limited or no surplus to supply in the market (Dugan, Dennis J., Leahy, William H., 1973).

Work cited:
1. Jencks, Christopher; David J. (2008).