Human Capital: Counting What Counts Over a Lifetime | People First Podcast

Rama George: A child born today in Sub-Saharan Africa could earn nearly 70% more… if the system worked differently.

So, what’s holding that future back? Not one barrier. Not one country. A pattern—playing out across health, education, and work. And today, we’re looking at a new way to measure that pattern across a lifetime: It’s the Human Capital Index Plus.

Hello and welcome to People First, the podcast that brings you stories and voices from Western and Central Africa. I'm your host, Rama George.

In this episode, we'll talk about the Human Capital Index Plus—or HCI+.

It asks a simple but powerful question: Can people grow up healthy, learn what they need, and then find productive work? Not just: Are there jobs?

But: Are children actually learning? Not just: Are there schools?

But: Are people staying healthy enough to thrive? And not just: Are there clinics? And do those jobs match people’s skills—and allow them to earn a decent living?

Here’s the headline: Globally, the average HCI+ score is about 186. In Sub-Saharan Africa, it’s closer to 127.

That gap isn’t abstract. This is lost income. Lost productivity. Lost potential—at massive scale.

To unpack what this index is really telling us, my guest today is Norbert Schady, Chief Economist for People Vice-Presidency for the World Bank Group.

Hello Norbet! Thank you for joining us.

Norbert Schady: It's a pleasure to be here. Thank you.

Rama George: Let’s start with the big picture. The world is at a demographic turning point. In the next 25 years, Africa will add 620 million workers. What makes this moment so pivotal—and what’s at stake if countries don’t build the right skills in time?

Norbert Schady: Adding 625 million new people into the workforce is an incredible challenge. It's also an opportunity . We know that up to two-thirds of the differences in per capita GDP across countries is a result of differences in their human capital. So think about these 625 million people who are gonna join the labor force. Are they gonna have the human capital that they need? What are the policies that we can put in place to ensure that they can keep on building it through school, after they leave school, when they get a job, that they have a job that actually allows them to build their human capital…So, it really is critical that we build human capital, uh, at this moment, uh, for these generations of young people in sub-Saharan Africa.

Rama George: So isn’t just about jobs—it’s about readiness from the start.

One thing that makes the HCI+ different is that it connects health, learning, and employment across a person’s entire life. Why is it so important to look at these stages together—rather than tackling them separately?

Norbert Schady: Human capital is built over a person's life, and what happens at one stage affects decisively what happens in the next stage. So, think about a child who, before they get to school, has not had any cognitive stimulation. Maybe they have a health problem. Maybe they are stunted. So when they arrive at school, they're not really ready to learn. All of that together is what determines the ability for people to earn decent incomes, for countries to grow, for societies to be successful. And you wanna be able to see, how am I doing relative to comparative countries? And that's what the HCI+ does.

Rama George: When people hear ‘human capital,’ they often think of access to, and the quality of, schools or health centers. Why is this an incomplete picture?

Norbert Schady: Many things determine human capital. Sort of more broadly, I think what happens in the home is very important. So we know, that by the time children enter schooling, there are big, big differences in the levels of cognitive development that the children who are behind on average never catch up. This is not a result of whether they go to a health center or to a school. We used to think of the job as a place where you take your human capital and use it. But now we know that it's not just a place where you use human capital. It's also a place where you either build hu- further human capital or, or you don't, and that depends on whether you're working, uh, and it also depends on the quality of the job that you have. So for all of these reasons, it's really important to think about the settings in which human capital is built, specifically to think about the home, about neighborhoods, level of pollution, violence and so on, and then of the workplace.

Rama George: In your recent report, you make the point that Sub-Saharan Africa has a “human capital crisis”. What do you mean by that?

Norbert Schady: Test scores in Sub-Saharan Africa have fallen in virtually every country in the region. There's no other region where this has happened. There's been a lot of progress in terms of school enrollment. If you were to take an average 15-year-old and compare that 15-year-old to a 15-year-old 15 years ago, on average, their ability to do basic math, their ability to, uh, understand, uh, reading and so on is lower than it was before. So, the decline in quality has been so large that it can't make up for the fact that more children are in school, uh, now than before.

Similarly, if you, for example, take an, an indicator like a- average human height. Adult height Sub-Saharan Africa is the only region where, uh, people now are on average shorter than they were, uh, 15 years ago, um, 20 years ago. No other region have we seen this. In fact, no time in history have we seen this kind of, uh, uh, decline in average, uh, human height. So, it's absolutely critical that the development community and countries themselves figure out what to do about, uh, these declines.

Rama George: Richer countries have higher human capital. But the HCI+ also shows that there are countries that have “beaten the odds”—they have much higher levels of human capital than you would expect given their level of per capita GDP. Can you give us some examples? And what did these countries do?

Norbert Schady: This is a critical question because it is true that on average, richer countries do better than poorer countries. But there are many countries that have beaten the odds, and I want to give two examples from Sub-Saharan Africa. Both Rwanda and Kenya have levels of human capital that are well above what you would expect for their level of income. So, obviously, you know, poverty limits you somewhat, but it doesn't limit you so much that you can't do anything. If you have sustained policies for a decade, uh, things really can improve quite dramatically.

Rama George: How about any countries in Western and Central Africa?

Norbert Schady: Yeah. So, so in Western and Central Africa, what we have is examples of specific programs that have done very well. So, for example, if you look at Côte d'Ivoire, Côte d'Ivoire has a formal apprenticeship program which has shown to both get more young people into jobs, so there are fewer young people who are NEETs, not in employment, education, or, or training. There's also e- an example from Togo, uh, where a program to give, what's called soft skills to young entrepreneurs had very high returns and increased, uh, the profits of those, uh, entrepreneurs in the companies where they worked.

Rama George: Do we currently have adequate data to measure countries’ human capital?

Norbert Schady: So, we're lacking data, I think, in two different, uh, dimensions. One dimension is that for many countries, the data can be very outdated. So it's hard to know how much improvement have they made. The second, uh, problem is that there are some critical dimensions of human capital that we don't measure adequately. So, for example, the only thing that we measure regularly about, uh, young children, is their nutritional status. But there are lots of things in early childhood that are critical to explaining people's trajectories thereafter. For example, uh, early childhood vocabulary, early childhood cognition, and we don't collect these data regularly, in a comparable way in, in many countries. That means that if you don't measure this, you don't know how you're doing, leave alone whether you're improving. So this is a real constraint for policy making.

Rama George: Thank you, Norbert! For those curious about their country’s score, we will drop the link in this episode’s transcript.

We’ve heard the big picture.

I recently met with Dr. Zainab Kwaru Muhammad-Idris, president of the Medical Women Association of Nigeria.

Dr. Zainab, we often think of learning and development as something that happens in schools. But from your experience, where does it really begin?

Dr. Zainab Muhammad-Idris: The homes, starting from the home, that's where the child begins his learning. So, if the homes do not have what it takes to really cater for the needs of that child, it is not likely that even by the time they start schooling that they can fit in and be receptive to the learning environment within the schools.

Unlike before, the traditional way, where you have mothers always been at home with the children to really stimulate that child’s learning, and the child gets maximum support….even though the parents were not educated. But now, we are getting more cosmopolitan, a lot of parents are in the workforce. A lot of mothers are no longer available for those children. So the home environment is no longer as conducive as you would think that that child needs to be exposed to. So that's the beginning of the faltery.

By the time they go into those schools, the schools are not equipped enough to cater for the needs of that child at that age. And it means the child is not getting enough at home. It's also not getting enough within the school environment.

Rama George: So how do we start to fix this—especially in contexts where resources are limited?

Dr. Zainab Muhammad-Idris: There has to be a meeting point where we have the whole of the community taking responsibility. This is what we are known for as Africans. This is what we have a strength in, and we shouldn't do away with it.

We can do things differently. We can use existing resources, existing structures. We look at our own peculiarities, we look at what best can work for us, and then we use it as appropriate technology to be able to deliver the same package of care of services that we want a child to benefit from.

Rama George: You mention communities stepping in—what does that look like in practice?

Dr. Zainab Muhammad-Idris: There was one example I saw in Senegal where, an early child center, operated a system where the mothers themselves are the ones taking responsibility for ensuring that the center continuously runs. And I don't think they are paid for doing that job. Every week, a different mother comes. She serves her shift or her role, and then she goes back, another mother comes. So, for me, this kind of community resource, where mothers, and ever caregivers, have the time to contribute, to volunteer, to take care of these children, can really add value.

In Kaduna State, for instance, through the World Bank-funded ANRiN project, we used some of our savings, to set up those creches in areas of need. A lot of young women, they need to bring their children to work so that they don't leave them at home at the mercies of so many things happening at the community level, including violence. So, we have that. And one of the those ones that we established was in the hospital setting. They didn't need to recruit any new staff. They now drafted some of their workforce, the nurses, to be rotating. It’s just like another ward. The child is not sick. The child was just brought to the center so that they can get their mothers to effectively do their work, and while they keep an eye on their children.

Rama George: And when these solutions are put in place—what still needs to improve to make them truly effective?

Dr. Zainab Muhammad-Idris: If everybody plays his or her role, and that can be a hub that other sectors can come in to say, okay, what do we contribute?

Rama George: Thank you Dr. Zainab!

In human capital, delays compound. You can’t fully fix weak foundations later—without paying a higher cost, with less time.

Invest in teachers.

Strengthen healthcare systems.

Improve the quality—not just the quantity—of jobs.

Because if nothing changes, the fastest-growing workforce in the world could also be the most underprepared.

But if those systems work together—health, education, and employment—that same workforce could power one of the most significant economic transformations of our time.

This is Rama George, and you’ve been listening to People First, the podcast featuring not only the voices but also the programs and initiatives supported by the World Bank Group in Western and Central Africa.

On behalf of the production team, thank you for tuning in!

We’ll be back soon with more voices and new ideas.

About People First Podcast

People First Podcast provides a human angle to concrete development topics as they affect people in Western and Central Africa. It also features World Bank project and initiatives. Join us for a sustainable and inclusive development!

About World Bank Group

The World Bank Group is one of the world's largest sources of funding and knowledge for low-income countries. Its five institutions share a commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development.