In October 2018, the World Bank launched the Human Capital Index, a tool to accelerate investments in the health and education of the next generation of workers, as part of the broader Human Capital Project. Dozens of countries have enthusiastically signed on as early adopters, but closing the human capital gap will depend as much on whether money is well spent as on how many new resources are mobilized.
“More schools don’t always translate into better learning outcomes. And more clinics don’t necessarily mean better health,” said Asli Demirguc-Kunt, Director of Research at the World Bank at the time. “Fortunately, we’ve learned a lot in recent years about more effective ways to deliver health and education.”
At a recent Policy Research Talk, World Bank Research Manager Adam Wagstaff highlighted just a handful of the bonanza of new research on human capital—in particular research related to the metrics tracked by the Human Capital Index. Wagstaff and researchers from across the World Bank working with developing country partners have unearthed valuable insights that can help countries better measure, manage, and build their human capital.
Perhaps most encouragingly, recent research has found that investing in reducing childhood stunting can pay big dividends. A 10-pronged nutrition program for children under five could lead to a 20 percent reduction in childhood stunting at an average cost of US$3.85 per capita. The rate of return on this investment as a result of greater future worker productivity is an estimated 17 percent—a figure that is comparable to the high returns typically seen from infrastructure investments.
While a focused nutrition intervention can pay dividends, fixing the broader health delivery system is much more challenging, according to Wagstaff. Many countries are far from providing health coverage that is both accessible and of high quality. Researchers judge this with a metric called effective health coverage, which takes into account both the percentage of the population that needs a service and that receives the correct treatment.
In Tanzania and Kenya, for example, fewer than 70 percent of doctors presented with a vignette about a patient with tuberculosis symptoms were able to identify the correct treatment. In Nigeria and Niger, that figure falls to less than 40 percent.
The depth of the problem may be even worse than what the vignettes suggest, however. In an innovative piece of research conducted in India, actors were trained to convincingly portray the symptoms of tuberculosis and were assigned to visit clinics at random. Faced with a well-trained actor, only 10 percent of Indian doctors correctly identified the right course of treatment, compared to 70 percent in the case of a vignette. Researchers have termed this the “know-do gap”—the large distance between what doctors know and the actual treatment they provide.