New World Bank Human Capital Index measures how much countries lose in economic productivity by underinvesting in their people
Skopje, October 11, 2018—New World Bank research released today gives policymakers 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 (HCI), shows that a child born in FYR Macedonia today will have reached 53 percent of her human capital potential when she grows up, compared to fully benefitting from quality education and full health. In FYR Macedonia, the HCI for girls is higher than for boys, 0.55 compared to 0.52 on a scale from 0 to 1.
FYR Macedonia’s Human Capital Index is lower than the average for its region and income group. Children in FYR Macedonia can expect to complete 11.2 years of pre-primary, primary and secondary school by age 18. However, when years of schooling are adjusted for quality of learning, this is only equivalent to 6.8 years, i.e. learning gap of 4.4 years. In fact, HCI indicates that a child born in FYR Macedonia today will be 53 percent as productive when she grows up as she could be if she enjoyed complete education and full health. Regarding the health outcomes, the report shows that 99 out of 100 children born in FYR Macedonia survive to age 5.
“The index value, especially the value of the education indicators is a call for immediate action. It seems reforms thus far have not transformed the education system enough to help the majority of students attain at least basic competencies,” says Marco Mantovanelli, World Bank Country Manager for FYR Macedonia. “An in-depth analysis of the OECD’s Programme for International Student Assessment (PISA) data is the first step in engaging in any serious discussion on possible policy action and reforms genuinely aimed at improving education outcomes in FYR Macedonia. It is important for the country to continue participation in the international large-scale assessments to monitor the quality of education system.”
Evidence shows that progress is possible. Poland enacted education reforms between 1990 and 2015, and experienced one of the fastest improvements in PISA scores in OECD countries. Vietnam recently topped the OECD average PISA score.
Currently, the World Bank is supporting FYR Macedonia’s efforts to strengthen Technical Vocational Education and Training and Higher Education through the Skills Development and Innovation Support Project (with a loan of US$24 million). It aims to improve transparency of resource allocation and promote accountability in higher education, enhance the relevance of secondary technical vocational education, and support innovation capacity in FYR Macedonia.
The World Bank is also supporting FYR Macedonia to improve access to quality early childhood education and care services for all children, in particular for children from socially disadvantaged backgrounds through the Social Services Improvement Project (loan of US$33.4 million). This project will improve school readiness, which is vital to life-long skills development and to strengthening the competitiveness of the country’s economy in the long term.
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