Our report starts by looking at global trends in human capital development—showing a shocking lack of progress in key outcomes.
When we look at student learning over the last 15 years, we see limited progress in low- and lower-middle-income countries. In most of them, they are doing even worse than they were in 2010.
This lack of progress has serious consequences. Weak learning outcomes limit productivity, reduce lifetime earnings, and constrain economic growth.
To reverse these trends, we need to expand the focus of policy beyond just schools and health clinics. We need to accelerate investment in homes, neighborhoods, and workplaces.
Let’s start with the home 👇
What happens at home is decisive for skill development and success. A family’s resources and the choices they make about their children’s care, health, and learning can have lifelong impacts.
Our research shows that children whose mothers have more education perform better in tests of vocabulary and math than children whose mothers have less. The gaps remain constant throughout childhood and adolescence, when children are typically attending school.
Resources at home are, of course, important. They allow families to buy books or pay university tuition. But resources alone are not sufficient. The care a child receives at home is vital. Care is nurturing, reading, and playing with kids. Care is helping them navigate emotions and keeping them safe. Findings from the report demonstrate that resources do not always compensate for low levels of care.
Thus policy to spur human capital accumulation at home would focus on increasing family resources and supporting parents to provide the care children and adolescents need to thrive. These include job programs and cash transfers for poor families and providing parents with tools to create stimulating and nurturing home environments.
Evidence from around the world suggests that these programs improve children’s educational attainment and lifelong health. They can also improve earnings when these children are adults by nearly 40 percent.
Neighborhoods also play a key role in productivity and people’s well-being. They provide access to quality schools, health care, safe streets, and job opportunities.
Families with the same income can have completely different outcomes based on where they live. For example, in Brazil, a low-income child growing up in a low-income neighborhood will go on to earn half as much as a low-income child growing up in a high-income neighborhood.
So, why does the neighborhood matter so much? First, people typically go to schools and clinics in their own neighborhood. If those services are poor, it will certainly impact learning and health outcomes.
But even when schools and clinics are good, other problems like violence and pollution can limit access. Sometimes, unlikely partners like education, environment, and infrastructure need to work together to realize the full benefits of human capital investments.
People often think of a job as the end goal — where current skills are put to use. But learning continues in the workplace. Through training and experience, people build skills.
In low- and middle-income countries, our research shows that about 70 percent of workers are in small-scale agriculture, low-quality self-employment, or micro firms. These are generally jobs with limited on-the-job learning opportunities. Even with the same gain in experience, earnings for the self-employed increase only half as much as what we see for salaried workers.
So, how can work become an engine of learning? Countries can support employer-provided training and promote a learning culture in existing jobs. Countries can also upskill labor market entrants and help them match with jobs through job platforms, and formal and informal apprenticeships. Countries can also increase women’s participation in the workforce by investing in childcare and ensuring a safe commute to work.
Recognizing the importance of homes, neighborhoods, and work expands policy options to build human capital. Our report provides examples of countries that have successfully integrated investments in these key settings — including collaboration with the private sector — to solve human capital challenges like malnutrition or low on-the-job learning.
We will also need a more ambitious data agenda to better track progress in these settings.
Taking an integrated settings approach and collecting and using more data — this is what is needed to build human capital where it matters.
The Human Capital Index Plus (HCI+) measures how effectively a country builds human capital, tracking the likelihood that children today will grow into healthy, educated, and productive adults by measuring progress across three components - health, education, and employment. By breaking down deficits by component, the HCI+ helps countries understand where investments are paying off and where more action is needed to strengthen future earnings and economic growth.
Did you know that 51% of future earnings in low- and middle-income countries can be lost when there are deficits in nutrition, learning, or employment?
Young people from around the world shared powerful stories about how homes, neighborhoods, and workplaces shape who we become as part of the Global Youth Video Call. From personal journeys to bold reflections on opportunity and inclusion, their videos bring the ideas of this report to life.
We are proud to showcase the top videos. You can discover all the winning submissions and hear more youth voices on our dedicated video showcase page.
