New World Bank Human Capital Index measures how much countries lose in economic productivity by underinvesting in their people
PRISTINA, October 11, 2018—New World Bank research released today gives policymakers in Kosovo and across the world compelling evidence that delivering better outcomes in children’s health and learning can significantly boost the incomes of people—and of countries—with returns far into the future.
Human capital—the knowledge, skills, and health that people accumulate over their lives—has been a key factor behind the sustained economic growth and poverty reduction rates of many countries in the 20th century, especially East Asia.
“For the poorest people, human capital is often the only capital they have,” said World Bank Group President Jim Yong Kim. “Human capital is a key driver of sustainable, inclusive economic growth, but people’s health and learning has not gotten the attention it deserves. I want this Index—which creates a direct line of sight between outcomes in health and education to future productivity—to drive countries to take action to improve outcomes.”
“The bar is rising for everyone,” Kim added. “Human capital is important for all countries at all income levels to compete in the economy of the future.”
The Human Capital Index, launched today at the World Bank-IMF Annual Meetings, shows that a child born in Kosovo today will be 56 percent as productive when she grows up as she could be if she enjoyed complete education and full health.
Kosovo’s Human Capital Index is lower than the average for its region but higher than the average for its income group. Children in Kosovo can expect to complete 12.8 years of preprimary, primary and secondary school by age 18. However, when years of schooling are adjusted for quality of learning, this is only equivalent to 7.7 years, which means there is a learning gap of 5.1 years. In regard to health outcomes, the report shows that 99 out of 100 children born in Kosovo survive to age 5. The report also estimates that 91 percent of 15-year old children will survive until age 60.
“To benefit from the demographic dividend and generate more rapid and inclusive growth, the general education system in Kosovo needs to provide greater opportunities to acquire the skill sets demanded by employers”, said Marco Mantovanelli, the World Bank Manager for Kosovo. “Improving the allocation of investments in human and physical capital is essential for faster and sustainable growth, and the World Bank is pleased to support a stronger focus on these challenges”, he added.
The World Bank is supporting Kosovo’s efforts to strengthen selected systems that contribute to quality, accountability, and efficiency improvements in education in the country, through the Kosovo Education System Improvement Project (credit of US$11 million).
The World Bank is also supporting Kosovo to improve the financial protection from health spending for the poor and the quality of care for priority maternal and child health and non-communicable disease services in Kosovo, through the Kosovo Health Project (credit of US$25.5 million).
The Human Capital Index measures the amount of human capital that a child born today can expect to attain by age 18, given the risks of poor health and education that prevail in the country where he or she lives. The measure includes:
- Survival – Will children born today survive to school age?
- School – How much schooling will they complete and how much will they learn?
- Health – Will they leave school in good health, ready for further learning and/or work as adults?
The HCI reflects the productivity as a future worker of a child born today, compared with what it could be if he or she had full health and complete, high-quality education, on a scale from zero to one, with 1 as the best possible score. A country score of 0.5, for example, means that individuals – and the country as a whole – are forgoing half their future economic potential. Calculated over 50 years, this translates into deep economic losses: a 1.4 percent annual loss in GDP growth.
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