Over the past decade, many countries have made important progress in improving human capital

1.1 THE HUMAN CAPITAL INDEX METHODOLOGY
The HCI is designed to highlight how improvements in current health and education outcomes shape the productivity of the next generation experience over the next 18 years the educational opportunities and health risks that children in this age range currently face. The HCI captures key stages of a child’s trajectory from birth to adulthood. In the poorest countries in the world, there is a significant risk that a child will not survive to her fifth birthday. Even if she does reach school age, there is a further risk that she will not start school, let alone complete the full cycle of 14 years of schooling, from preschool to grade 12, which is the norm in rich countries. The time she does spend in school may translate unevenly into learning, depending on a variety of factors including the quality of teachers and schools that she experiences. When she turns 18, she carries with her the lasting effects of poor health and nutrition during childhood that limit her physical and cognitive abilities as she develop into adulthood.
The design of the HCI has been guided by a number of criteria. First, the HCI is outcome- rather than inputs- based. This helps focus the conversation on what matters—results—and provides incentives for countries not only to invest more, but also to invest better in human capital, without concerns that the HCI might be susceptible to gaming. The likelihood that a cross-country benchmarking exercise can spur policy action is strongly influenced by the over-time and cross-country coverage of the metric. Aiming for good coverage limits the components of the index to data that are systematically available for a large number of countries over time. Yet, for an index to promote change, the components of the HCI should be responsive to policy action in the short to medium term. The need to produce such a metric has oriented the choice of components toward measuring the human capital of the next generation, rather than measuring thestock of human capital of the current workforce, which largely reflects policy choices made decadesago, when the current workforce was of school age. As a result, the HCI quantifies 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: