Sunday, June 6, 2021

The Human Capital Index 2020

                 This post is a summary of the book with the title above published in 2021 at   https://openknowledge.worldbank.org/handle/10986/34432

                        The Human Capital Index (HCI) is an international metric that benchmarks key components of human capital across economies. The HCI was launched in 2018 as part of the Human Capital Project, a global effort to accelerate progress toward a world where all children can achieve their full potential. Over the past decade, many economies have made important progress in improving human capital. Today, however, COVID-19 pandemic threatens to reverse many of those gains. Urgent action is needed to protect hard-won advances in human capital, particularly among the poor. Human capital consists of the knowledge, skills and health that people accumulate over their lives. Human capital also enables people to realize their potential. The five components of the HCI do not cover all the important aspects of the accumulation and productive use of human capital. In particular, the index is silent on the opportunities to use accumulated human capital in adulthood through meaningful work. In many economies, a sizable fraction of today's young people may not find employment in jobs in which they can use their skills and cognitive abilities to increase their productivity. By bringing salience to the productivity implications of shorfalls in health and education, the HCI has not only clarified the importance of investing in human capital but also highlighted the role that measurement can play in catalyzing consensus for reform. What explain these variations in human capital outcomes? Despite a strong correlation between the HCI and GDP per capita, human capital does not always move in lockstep with economic development. Economies like Burundi, Estonia, Uzbekistan, and Vietnam have HC outcomes that are higher than predicted by their GDP per capita. Conversely, in a number of economies HC is lower than per capita income would suggest. Among these are several  resource-rich countries in which HC has not yet matched the potential that one would anticipate, given these economies' wealth. The HCI is based on outcomes that typically change slowly from year to year. Some of them, such as stunting and educational tests scores, are measured every three years. Health, education, social protection, and other complementary policies informed by rigorous measurement can take countries' human capital beyond the levels previously achieved, opening the way to a more prosperous and inclusive future. The Human Capital Project is a global effort to support human development as a core element of countries' overall strategies to increase growth. The main objective is progress towarda world in which all children can achieve their full potential. For that to happen, children need to reach school well-nourished and ready to learn, attain real learning in the classroom, and enter the job market as healthy, skilled and productive adults. The resulting HCI quantitatively illustrates the key stages in a child's human capital trajectory and their consequences for the productivity of the next generation of workers, with three components: 1) survival from birth to school age, measured using under-5 mortality rates.   2) Expected years of learning-adjusted school, combining information on the quantity and quality of education.   3) health.  Ceará is a northeastern state in Brazil that improved its education outcomes much faster than the rest of Brazil. Almost all of Ceará 184 municipalities had low levels of quality in teaching and had very limited resources, spending about one-third less in per-student education than wealthier states such as São Paulo. Among these municipalities is Sobral (with 200,000 inhabitants), which in the late 1990s suffered from a highly fragmented school system, with many poorly maintained small school, most in rural areas and with multigrade classes. Despite a reorganization of the school system, a 2005 diagnostic found that 40% of grade 3 children were not able to read. and 21% of lower-secondary school students dropped out. Between 2005 and 2015, Sobral managed ro achieve remarkable progress in educational outcomes. It ranked first among 5,570 municipalities in the country in both primary and lower-secondary education. Ceará's approach was driven by a mix of the following elements, whose effectiveness is supported by international evidence: the provision of fiscal and nonmonetary incentives for municipalities to achieve education outcomes; technical assistance to municipal school networks to enhance teacher effectiveness and achieve age-appropriate learning; the regular use of a robust monitoring and evaluation system, following by adequate action; and giving municipalities autonomy and accountability to achieve learning. Sobral organized its education policy under four pillars: continuous use of student assessment, a focused curriculum with a clear learning sequence and prioritization of foundational skills, a pool of well-prepared and motivated teachers, and a system of autonomous and accountable school management with school principals appointed through a meritocratic technical selection process. Continuity of commitment and effort over successive governments is key to reaching any long-term goals, but especially in growing human capital, which can take decades. HCI 2020 arrives at a time when policy makers across the world face urgent choices. Strategic decisions made now have the power to protect and strengthen countries' human capital and, with it, their economic future. Below the HCI 2020 from the highest score to the lowest, the list in the left is for PanAmerican countries and in the right for the rest of the world. Again, for no reason my post is being messed up. The letter became smaller and the two vertical lists that I did as I did on the GDP growth post is totally mixed. 

PanAmerican Countries                                         Rest of the world

Canada   0.80                                                                Japan   0.80                                                              U.S.A.    0.70                                                                 South Korea   0.80                                                   Chile   0.65                                                                   Sweden   0.80                                                          Costa Rica   0.63                                                            Ireland   0.79                                                          Mexico   0.61                                                                  U.K.   0.78                                                             Peru   0.61                                                                      Norway   0.77                                                       Argentina   0.60                                                              Australia   0.77                                                       Uruguay   0.60                                                              Portugal   0.77                                                        Colombia   0.60                                                               France   0.76                                                          Ecuador   0.59                                                                Germany   0.75                                                      Brazil    0.55                                                                    Italy   0.73                                                          Paraguay   0.53                                                              Spain   0.73                                                        Nicaragua   0.51                                                          Vietnam   0.69                                                  Panama   0.50                                                             Russia   0.68                                                   Guyana   0.50                                                                Turkey   0.65                                                    Dominican Republic   0.50                                                      China   0.65                                                   Honduras   0.48                                                               India   0.49                                                    Guatemala   0.46                                                              South Africa   0.43 

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