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

BETTER MEASUREMENT ENABLES BETTER POLICY
As the COVID-19 crisis continues to unfold, data and measurement are more vital than ever to shape governments’
response in the immediate and guide future policy choices towards (cost-) effective solutions.
Better measurement and data use are investments that pay off, a consideration that is particularly important
now, as countries face dwindling fiscal space and many competing demands.
By generating a shared understanding among diverse actors, measurement can shine a light on constraints
that limit progress in human capital. In the same way, effective measurement can facilitate political consensus
based on facts and help muster support for reforms. Measurement also enables policy makers to
target support to those who are most in need, which is often where interventions yield the highest payoffs.
As policy implementation moves forward, measurement provides feedback to guide course corrections.
In the context of a pandemic, governments that use relevant data in real time are better able to monitor
the evolution of disease transmission and continuously update containment strategies, while responding
to the immediate and long-term effects of the economic crisis on households and communities. At all
times, data are especially important in countries affected by fragility or conflict, though measurement is
far more difficult in these settings.
The HCI offers a high-level view of human capital across countries that can help to catalyze new conversations
with key stakeholders. At the same time, much greater depth in measurement and research
is needed to better understand the dynamics of human capital accumulation, including across socioeconomic
groups and geography, and how policies can affect it. Some key measurement improvements
– such as leveraging phone surveys and making better use of administrative data – can be achieved in
the short term. Other improvements will demand a more sustained effort from countries and development
partners. These longer-range efforts include rethinking the architecture of country data systems to
connect different administrative data sources, and fielding surveys to better understand the needs and
behavior of teachers and health providers.
The COVID-19 crisis threatens gains in human capital that countries have achieved through decades of
effort. A renewed, society-wide commitment is needed to protect human capital in the immediate and to
remediate the looming losses in the longer run. Challenges range from crafting context-sensitive school
re-opening protocols to deeper reforms that will promote children’s learning at all stages: starting from
cognitive stimulation in the early years, then continuing to nurture relevant skills throughout childhood
and adolescence. Building blocks for success will include better-prepared teachers, better-managed
schools, and incentives that are aligned across the many stakeholders in education reform.
Support to households will be essential not only to buffer income losses but also to sustain the demand
side of schooling and health care. Such support can come through cash transfers, but also interventions
aimed at reconnecting workers to jobs. Strengthening disease surveillance and a renewed commitment
to universal health coverage will be essential to build resilient health systems that offer affordable, quality
care to all. Investments in water, sanitation, and – increasingly – digitalization are important complements
to sustain human capital accumulation. Current deepening inequalities in human capital outcomes make
it imperative to target interventions to children from the most disadvantaged families. This is the way
to prevent setbacks where they risk generating the worst consequences for people’s lifetime trajectories.
With fiscal space shrinking as competing priorities multiply, policymakers face hard choices. Proven
strategies include engaging the whole of society, identifying cross-sectoral synergies, and using data
to select cost-effective interventions and track their effective implementation. These approaches will
not make tough policy trade-offs painless. But they will enable leaders to choose the options that have
the highest probability of success. Applying these tools, governments can go far toward protecting and
rebuilding human capital in the wake of COVID-19. And that is not all. Strong, evidence-driven human
capital investments now can do far more than restore what has been lost. Health, education, social protection,
and other 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.
At the organization’s 2018 Annual Meetings, the World Bank Group launched the Human Capital Project, an unprecedented global effort to support human capital developmentas a core element of countries’ overall strategies to increase productivity and growth. The main objectiveof the project is rapid progress toward a 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 learningin the classroom, and enter the job market as healthy, skilled, and productive adults.
Central to this effort has been the Human Capital Index (HCI), a cross-country metric measuring the
human capital that a child born today can expect to attain by her 18th birthday, given the risks of
poor health and poor education prevailing in her country.1 The HCI brings together measures of different
dimensions of human capital: health (child survival, stunting, and adult survival rates) and the
quantity and quality of schooling (expected years of school and international test scores). Using estimates of the economic returns to education and health, the components are combined into an index that captures the expected productivity of a child born today as a future worker, relative to a benchmark of complete education and full health. The Human Capital Index ranges from 0 to 1, sothat an HCI value of, for instance, 0.5 implies that a child born today will only be half as productive as a future worker as she would be if she enjoyed complete education and full health. By benchmarking shortfalls in future worker productivity deriving from gaps in human capital across countries, the HCI underscores the urgency of improving human capital outcomes for children today.
In response to the call for governments to invest in the human capital of their citizens, 77 countries
across the world are now part of the Human Capital Project. These countries have affirmed
building, protecting, and employing human capital as a national priority and have been prioritizing
investments in human capital and undertaking difficult reforms, sometimes in very challenging
contexts. With a view to maintaining this momentum, the 2020 update of the HCI incorporates the
most recent data to report HCI scores for 174 countries.