1. What is the Human Capital Project?
The Human Capital Project is a global effort to accelerate more and better investments in people for greater equity and economic growth. As of October 2024, 95 countries at all income levels are working with the World Bank Group on strategic approaches to transform their human capital outcomes. We are scaling up human capital investments in Sub-Saharan Africa with a strong focus on women’s empowerment, leveraging technology, and accelerating innovation, among other priorities. In the Middle East and North Africa, we are focusing on areas such as early childhood and building the resilience of vulnerable people.
We have launched a Human Capital Project country network to connect governments that are prioritizing human capital and to channel expertise where it is most needed. Focal points, usually based in the Ministries of Finance, Economy, or Planning (and sometimes in sectoral ministries) connect regularly to exchange knowledge and feedback.
Human capital is at the center of our global strategy for development. Protecting and investing in people is one of three main ways we are working to reach our goals of ending extreme poverty by 2030 and boosting shared prosperity in all countries. It is closely integrated with our efforts to promote sustainable, inclusive growth and build resilience across developing countries. It is also a cross-cutting priority for IDA-19, the current cycle of IDA financing covering July 2020 - June 2023, the World Bank Group’s fund for the world’s poorest countries.
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2. What is human capital and why does it matter?
Human capital consists of the knowledge, skills, and health that people invest in and accumulate throughout their lives, enabling them to realize their potential as productive members of society. Investing in people through nutrition, health care, quality education, jobs and skills helps develop human capital, and this is key to ending extreme poverty and creating more inclusive societies.
As noted in the World Development Report (WDR) 2019: The Changing Nature of Work, the frontier for skills is moving rapidly, bringing both opportunities and risks. There is mounting evidence that unless they strengthen their human capital, countries cannot achieve sustained, inclusive economic growth, will not have a workforce prepared for the more highly skilled jobs of the future, and will not compete effectively in the global economy. The cost of inaction on human capital development is going up.
Finance Ministers who have been meeting to discuss human capital at recent Spring and Annual Meetings of the World Bank Group have emphasized the importance of human capital to the jobs and economic transformation agenda in countries at all stages of development.
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3. What is the state of human capital in the world today?
Despite unprecedented human development gains over the past 25 years, serious challenges remain, especially for developing countries.
In 2019, more than 1 in 5 young children were stunted due to under-nutrition (with low height for their age—a red flag indicator for the risk of physical and cognitive deficits) (JME 2020). The current global pandemic may lead to even higher numbers of children stunted.
A learning crisis is holding many countries back. Data show that in some countries, children acquire significantly fewer years of learning than in other countries, despite being in school the same length of time. This is exacerbated by the pandemic – with many children out of school and losing out on learning.
People in developing countries spend half a trillion dollars annually — over $80 per person -- out of their own pockets to access health services, and such expenses hit the poor the hardest. COVID-19 is also causing significant disruptions in essential health services including routine vaccinations and child healthcare.
In the world’s poorest countries, four out of five poor people are not covered by a social safety net, leaving them extremely vulnerable to shocks.
Nearly 300,000 children die every year from diarrhea linked to a lack of access to safe water and sanitation.
The first edition of the Human Capital Index (HCI), published by the World Bank Group in October 2018 and updated in 2020, shows that nearly 60% of children born today will be, at best, only half as productive as they could be with complete education and full health (as defined by the index, see question 5). This reflects a serious human capital crisis, with strong implications for economic growth and the world’s collective ability to end extreme poverty by 2030.
Gaps in human capital are at risk of widening amid rapid global changes in technology, demography, fragility, and climate. Conflict events and pandemics can have a devastating effect on human capital through loss of life, livelihood, nutrition, and the interruption of essential health and education services. Such impacts will likely reverberate throughout many individuals’ lifespan limiting their productivity. Yet investment in people is often neglected. This is despite many examples of rapid national transformation of human capital—including Singapore, the Republic of Korea, and Ireland—and specific successes in some of the world’s poorest countries.
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4. What is the World Bank Group doing to help countries protect human capital?
As countries around the world work to contain the spread and impact of COVID-19, the World Bank Group has mounted the fastest and largest crisis response in its history to help developing countries strengthen their pandemic response and health care systems.
With the pandemic’s rapid spread into developing countries, the World Bank Group is delivering record levels of support to clients. It is making available up to $160 billion in financing capacity through June 2021. Our support is tailored to the health, economic, and social shocks that countries are facing, and includes over $50 billion of IDA resources on grant and highly concessional terms.
The Bank Group’s emergency support operations are helping over 100 developing countries save lives and detect, prevent, and respond to the pandemic. We are also helping countries access critically needed medical supplies by reaching out to suppliers on behalf of governments.
In addition to ongoing health support, operations emphasize social protection, especially through cash transfers, as well as poverty alleviation and policy-based financing. The World Bank is also working to restructure, redeploy, and reallocate existing resources in projects it finances.
The World Bank Group’s crisis response comprises three stages – relief, restructuring, and resilient recovery. It focuses on the following main areas:
Saving lives – We are helping countries stop transmission, deliver health services, ensure vulnerable households’ access to medical care, and build readiness for future pandemics. We are committed to making sure that poorer countries have fair and equitable access to vaccines as these become available.
Protecting poor and vulnerable people – We are supporting income and food supplies for the most vulnerable as well as employment for poorer households, informal businesses, and microenterprises. We are helping communities and local governments cope with crisis impacts, improve and expand services, and build resilience for future shocks.
For example, the Bank is helping India scale-up cash transfers and food benefits, using a set of existing national platforms and programs, to provide social protection for essential workers involved in COVID-19 relief efforts. This is benefiting vulnerable groups, particularly migrants and informal workers, who face high risks of exclusion.
Ensuring sustainable business growth and job creation – We are providing policy advice and financial assistance to businesses and financial institutions, to help preserve jobs and ensure that companies, especially small and medium enterprises, can weather the crisis and return to growth.
Strengthening policies, institutions, and investments – With an emphasis on governance and institutions, we are helping countries prepare for a resilient recovery. Working closely with the IMF, we are helping countries manage public debt better, make key reforms in financial management, and identify opportunities for green growth and low-carbon development as they rebuild.
You can read more about the first set of health emergency response projects supported by the World Bank Group, and also about the impact of the first 100 days of the overall response.
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5. What is the Human Capital Project expected to achieve?
The Human Capital Project is helping create the political space for national leaders to prioritize transformational investments in health, education, and social protection. The objective is rapid progress toward a world in which all children are well-nourished and ready to learn, can attain real learning in the classroom, and can enter the job market as healthy, skilled, and productive adults.
The project has three pillars:
The Human Capital Index (HCI) quantifies the contribution of health and education to the productivity of the next generation of workers. Countries are using it to assess how much income they forego because of human capital gaps, and how much faster they can turn these losses into gains if they act now. Learn more from this video.
The index was launched in October 2018 and updated in mid-September of 2020. The update leverages new PISA results and includes 17 additional countries to cover 98% of the world’s population. The 2020 HCI also has more complete gender disaggregation.
A robust measurement and research effort is underway to complement the index and help countries take effective action. Within countries, credible measurement of education and health outcomes sheds light on what works and where to target resources. It also increases policy makers’ awareness of the importance of investing in human capital, creating momentum for government action. Globally, comprehensive measurement and novel primary data collection efforts are essential to identify areas of strength and opportunity to improve human capital outcomes. The Human Capital Project will help nourish the research and analytics on what promotes human capital development, for example, by scaling up the Service Delivery Indicators program and the Measuring Early Learning Quality and Outcomes survey.
Country engagement, based on a “whole of government” approach, is helping countries tackle the worst barriers to developing their human capital. This approach encourages high-level leadership across time, connecting the dots between sectoral programs and strengthening the evidence base. Our work with countries emphasizes efficiency and quality, policy reforms, and domestic resource mobilization, so that they aren’t just spending more—but spending better.
One example of this approach as seen in World Bank country engagement is Madagascar’s Investing in Human Capital Development Policy Operation series. The first operation aims to support the Government of Madagascar's investment in human capital by improving human resources in health and education, availability and predictability of financial resources in the social sectors, and legal protections for women and children. The second is being prepared.
The Human Capital Project is supporting the scale-up of this type of support for policy and institutional reform, and also working on a range of tools and products to help countries achieve their goals, for example, on human capital public expenditure and institutional reviews, and case studies capturing country-level successes and innovations.
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Human Capital Index Plus (HCI+) FAQs
6. What is the Human Capital Index Plus (HCI+)? How is it calculated?
The HCI+ is a summary measure of the average expected human capital a child born today can expect to acquire by working age, given the risks of poor health, education, and employment that prevail in the country where she lives. A full accounting of the HCI+ methodology is available on the World Bank’s Open Knowledge Repository, and a helpful video is available here.
A significant innovation is that the index measures the contribution of health, education, and employment to the productivity of individuals and countries, anchored in rigorous micro-econometric studies.
Ranging between 0 and 325, the index takes the value 325 only if a child born today can expect to achieve full health (defined as no stunting and full adult survival from 15 to 60), achieve her formal education potential (defined as 13 years of high-quality school by age 18 and an additional 4 years of tertiary education), and continue to learn new skills in a high quality job (defined as 40 years of wage employment) .
A country’s score reflects the sum of many contributions to productivity—from better health, stronger learning, and more effective participation in the workforce. Each component adds to the total in units that are roughly comparable to percentage-point contributions to adult earnings.
The index can directly be linked to scenarios for the future income of countries as well as individuals. If a country improves the score by 15 points, then future GDP per worker could be 15% higher.
The index is presented as a country average and includes a breakdown by gender for countries where data is available.
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7. What are the data sources for the HCI? How are these data vetted?
All the data used to measure the HCI are publicly available and directly and consistently measured across countries.
Survival rates. Survival rates for each of the life stages are calculated using Life Tables retrieved from the United Nations Population Division World Population Prospects.
Fraction of children not stunted. Healthy growth in children under five is measured using stunting rates from the UNICEF-WHO-World Bank Joint Malnutrition Estimates (JME).
Enrollment and repetition rates. Expected years of school are measured using enrollment and repetition rates retrieved from the UNESCO Institute for Statistics (UIS).
Harmonized Learning Outcomes. Data on harmonized test scores comes from major international student achievement testing programs and is harmonized by the World Bank.
Tertiary completion rates are based on household and labor force surveys, supplemented with administrative data on gross graduation and gross enrollment rates.
Labor force participation rates, employment rates and the share of employed in wage employment. Data are retrieved from the International Labour Organization Department of Statistics (ILOSTAT).
The data used in HCI+ calculations undergo an extensive Bank-wide data review process. Data are shared with World Bank country teams who verify data with education, health, and employment experts within the World Bank as well as government counterparts from relevant line ministries. When data are missing or outdated, gaps are filled using publicly available estimates from country administrative data systems or nationally representative survey data. Detailed notes on data sources for all countries covered in the HCI are reported in HCI Country Data files on the Human Capital Project website and are also available for download as metadata on the World Bank’s DataBank website.
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8. What are Harmonized Learning Outcomes (HLO) and how are they calculated?.
The Harmonized Learning Outcomes used to measure the quality of schooling across countries are based on a large-scale effort to harmonize international student achievement tests from several multicountry testing programs to produce the Global Dataset on Education Quality (Patrinos and Angrist, 2018). The dataset harmonizes scores from four major international testing programs—the Trends in International Mathematics and Science Study (TIMSS) program, the Progress in International Reading Literacy Study (PIRLS), the Programme for International Student Assessment (PISA), and the Literacy and Numeracy Assessment (LaNA)—as well as three major regional testing programs—the Regional Comparative and Explanatory Study (ERCE), the Program for the Analysis of Education Systems (PASEC), the Pacific Island Learning and Numeracy Assessment (PILNA), theSoutheast Asia Primary Learning Metrics (SEA-PLM), and the Southern and Eastern Africa Consortium for Monitoring Educational Quality (SACMEQ). It also incorporates Early Grade Reading Assessments (EGRAs) coordinated by the United States Agency for International Development, and data from the Multiple Indicator Cluster Survey (MICS) conducted by United Nations Children's Fund (UNICEF).
The harmonization methodology relies on the production of an “exchange rate” between international student achievement tests and their regional counterparts, which can then be used to place tests on a common scale. Test scores are converted into TIMSS units as the numeraire, corresponding roughly to a mean of 500 and a standard deviation across students of 100 points. The exchange rate is based on the ratio of average country scores in each program to the corresponding country scores in the numeraire testing program for the set of countries participating in both the numeraire and the other testing program. For example, consider the set of countries that participate in both the PISA and the TIMSS assessments. The ratio of average PISA scores to average TIMSS scores for this set of countries provides a conversion factor for PISA into TIMSS scores that can then be used to convert the PISA scores of all countries into TIMSS scores. The exchange rate is calculated pooling all overlapping observations between 2000 and 2017 and is therefore constant over time. This ensures that within-country fluctuations in harmonized test scores over time for a given testing program reflect only changes in the test scores themselves and not changes in the conversion factor between tests.
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9. What are the most impactful indicators that influence the HCI+?.
The HCI+ allows users to break down a country’s score into contributions from three distinct pillars: health & nutrition, education, on-the-job learning. Within each pillar, policymakers can identify which specific components like survival, learning, employment are driving underperformance. While the HCI+ scores cannot substitute for an in-depth study of a country’s problem areas related to human capital, they can signal areas that could use closer attention.
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10. What is the tie between the HCI+ and Lifetime Earnings & GDP?.
Your lifetime earnings depend on two factors: how much you're paid per year (your wage) and how long you work.
Lifetime Earnings = Annual Wage × Years Worked
In competitive labor markets, your wage is determined by your productivity—how much economic value you create for your employer each year. The more productive you are, the higher your wage. And your productivity, in turn, comes largely from your human capital: your education, health, skills, and experience. This creates a direct chain:
Human Capital → Productivity → Wages → Lifetime Earnings
The HCI+ (Human Capital Index Plus) measures the average productivity a newborn can expect to have throughout their entire working life, based on current conditions in health, education, and employment. Each of the eleven components in the HCI+ is weighted based on research linking it to earnings impact.
When a country improves its human capital—through better education, healthcare, or employment opportunities—each worker becomes more productive. This directly translates into economic growth in two ways:
Individual level: Higher human capital → higher productivity → higher wages → higher lifetime earnings. When the HCI+ rises, workers earn more over their lifetimes because they are more productive and command higher wages.
National level: A country's GDP is the total value of what all its workers produce. When the entire workforce has higher human capital (higher HCI+), aggregate productivity rises, and so does national GDP.
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11. Do improvements in the HCI+ mean a country’s GDP will grow instantly?.
No, the Human Capital Index Plus is linked to GDP growth over the long run, not immediately. The HCI+ measures the average human capital a newborn can expect to have throughout her working life if current conditions hold. This means that improvements in human capital affect GDP over decades as today's newborns grow up and enter the workforce.
In addition, economic theory suggests that improvements in human capital will produce greater investments in physical capital —machines, factories, and infrastructure— because a better educated workforce makes these investments more productive. These effects are likely to occur in the long run as well.
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12. Does the HCI+ capture all aspects of human capital?.
No, the HCI+ should not be interpreted as the final word on how well countries are doing in creating human capital. As a globally comparable index, it is composed only of indicators with broad country coverage and a clear research link to lifetime earnings. There are many factors that may be relevant regionally or at specific income levels that are not captured in the HCI+. There are also factors that may be important, but do not yet have established research linking them to productivity. The HCI+ can offer a glimpse into how countries are doing in creating human capital, but it does not substitute for an in-depth review tailored to each country.
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13. How often will HCI+ be updated?.
Because the components captured by the HCI+ tend to move slowly, over the medium term, the update cycle will be every 3-5 years going forward.
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14. Why is wage employment included in the HCI+? How does HCI+ handle informality?.
The HCI+ uses the share in wage employment as a proxy of high-quality employment.
As discussed in the forthcoming Human Capital Flagship report, formal wage jobs typically offer more structured skill development—through training, mentorship, specialization, and exposure to workplace practices—resulting in faster human capital accumulation (3.9% per year for youth, 3.0% for adults). Non-wage employment, while still valuable for building skills and experience, tends to accumulate human capital more slowly (2.0% per year for youth, 1.8% for adults). Both types of work contribute to human capital—just at different rates—and both are better than not working at all, which leads to skills depreciation at 1.25% per year.
The HCI+ doesn't directly measure informal employment. Instead, it distinguishes between formal wage employment and non-wage employment (mainly self-employment).
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15. Will the measure penalize countries with young populations?
No. Scores are based on a hypothetical cohort of newborns—not demographic composition—so countries with more youth do not automatically score lower.
For enquiries, please contact: humancapital@worldbank.org
Last Updated: Oct 02, 2026