There’s no equality in the world and tools needed to measure the progress of improving human capital. In 2018 The Human Capital Index was launched as long awaited tool to measure the global effect to accelerate progress towards a world where all children can achieve their full potential. New 2020 Human Capital Index edition provide the insight on the state of himan capital before COVID-19 (data included till March 2020). This also a baseline to trace the influence of coronavirus pandemic on human capital worldwide.

On average child born just before the pandemic could expect to achieve just 56% of potential productivity as a future worker. Child born in low-income country could expect to reach 37% potential productivity, compared to 70% potential productivity for child born in high-income country. After March (start of global pandemic restrictions) potential productivity drastically reduced as millions of people lost their income. The difference between the richest countries and the poorest countries highlighted during the pandemic restrictions. In developed countries people can rely on financial help from government. In poor countries people can rely only on themselves. Sad reality of coronavirus pandemic.

In many countries hard-won human capital gains are at risk. This index measures the human capital that a child born today can expect to achieve by 18th birthday. In 2020 report available data from 174 countries. Countries’ GDP influence significantly on kids future but it’s not the single factor. There’s a few resource-rich countries with high GDP that not yet achieved high potential productivity (check list below).

In The Human Capital Index quantity and quality of schooling show the real difference between high-income and low-income countries. The significant difference between expected years that child will attend the school and quality of education will be crucial while applying for jobs. In Index available data from 153 countries that show that girls are able to achieve higher human capital compared to boys.

Unfortunately countries impacted by conflicts, political instability, violence, famine, prone to natural disasters show lower human Capital Index. Where’s no stability, there’s lower index.

Because of coronavirus pandemic close to 1.6 billion kids worldwide was out of school. Some countries managed to start successful online studying, but majority of countries was not prepared for online education. This will reduce quality of education and millions of pupils will not return to school due to various reasons. Pandemic triggered lockdowns will force many kids to drop out of school and it will reduce global average learning adjusted years of school from 7.8 to 7.3 years.

Another big problem is human capital underutilisation under which human couldn’t achieve maximum potential because of external factors. Underutilisation of human capita could be calculated for 160 countries (human capital index multiplied by an utilisation rate. Most workers unable to fully use their human capital to increase their productivity because of various factors. Also let’s not forget about gender gap.

The Human Capital Index highlights the importance of affordable healthcare and education. Also Index show the potential influence of current healthcare and education situation (coronavirus time) on future generations. The Index based on three main components:

  1. Child survival from birth to school age measured by using under-5 mortality rates.
  2. Expected years of schooling (quantity and quality of education).
  3. Health (adult survival rate 15-60 years and the rate of stunting of children under age of 5).
Source World Bank

According to World Bank report the best place for growth of human capital is North America and Europe, and the worst place is Sub-Saharan Africa. The difference is extreme. The correlation between low Human Capita Index and poverty is high. This prove that better healthcare and education support growth of more competitive individuals.

List of countries ranked by Human Capital Index:

Human Capital Index <0.40 average:

  • Central African Republic (0.29).
  • Chad (0.30).
  • South Sudan (0.31).
  • Mali (0.32).
  • Sudan (0.38).
  • Ethiopia (0.38).
  • Madagascar (0.39).

Human Capital Index 0.40 – 0.50 average:

  • Zambia (0.4).
  • Afghanistan (0.4).
  • Pakistan (0.41).
  • Iraq (0.41).
  • South Africa (0.43).
  • Bangladesh (0.48).
  • India (0.49).
  • Egypt (0.49).

Human Capital Index 0.50 – 0.60 average:

  • Nepal (0.5).
  • Philippines (0.52).
  • Indonesia (0.54).
  • Brazil (0.55).
  • Saudi Arabia (0.58).
  • Iran (0.59).

Human Capital Index 0.60 – 0.70 average:

  • Sri Lanka (0.6).
  • Argentina (0.6).
  • Thailand (0.61).
  • Malaysia (0.61).
  • Ukraine (0.63).
  • Turkey (0.65).
  • China (0.65).
  • UAE (0.67).
  • Vietnam (0.69).

Human Capital Index 0.70 – 0.80 average:

  • United States (0.7).
  • Italy (0.73).
  • Spain (0.73).
  • Israel (0.73).
  • Germany (0.75).
  • Switzerland (0.76).
  • France (0.76).
  • New Zealand (0.78).
  • United Kingdom (0.78).

Human Capital Index 0.80+ average:

  • Sweeden (0.8).
  • Macao (0.8).
  • Finland (0.8).
  • Canada (0.8).
  • South Korea (0.8).
  • Japan (0.8).
  • Hong Kong (0.81).
  • Singapore (0.88).

The Human Capital Index reflect the current situation and all data it’s pre-covid data. It’s expected that in 2021 report low-income countries will show the biggest drop in index.

This is part 1. Tomorrow I’ll write the second part of this research. Subscribe to my blog for more useful blogs.


Trader, blogger, traveler

Leave a Reply