Bharat SainiLast Updated on October 22, 2018 by Bharat Saini
“Measuring human capital: a systematic analysis of 195 countries and territories, 1990–2016”, an unprecedented scientific study conducted by the Institute for Health Metrics and Evaluation (IHME) at the request of the World Bank and published on 24 September 2018 in journal The Lancet, finds India ranks 158th in 2016 ranking up from 162nd in 1990, among nations for its investments in education and health care as measurements of its commitment to economic growth; US drops from 6th to 27th as the study yields other unexpected results over 26-year period. In 2016 China is ranked at 44, Pakistan at 164, Bangladesh at 161 and Russia at 49. The study underscores that a country’s economy grows with increases in its human capital score.
The study places Finland at the top in 2016 as it had the highest level of expected human capital of 28.4 and Niger had the lowest expected human capital of less than 1.6 years. Turkey showed the most dramatic increase in human capital between 1990 and 2016; Asian countries with notable improvement include China, Thailand, Singapore, and Vietnam. Within Latin America, Brazil stands out for improvement. All these countries have had faster economic growth over this period than peer countries with lower levels of human capital improvement.
Human capital is recognised as the level of education and health in a population and is considered an important determinant of economic growth. World Bank President, Dr. Jim Yong Kim, defines human capital as “the sum total of a population’s health, skills, knowledge, experience, and habits.” It is a concept that recognizes that not all labour is equal, and the quality of workers can be improved by investing in them.
Kim has stated that measuring and ranking countries by their human capital will enable comparisons over time, thereby providing governments and investors, insights into where critical investments are needed to improve health and education.
As countries vary widely in the rate of human capital formation, the study focuses on the number of productive years an individual in each country can be expected to work between the ages of 20 to 64, taking into account years of schooling, learning in school, and functional health. The calculation is based on systematic analysis of 2,522 surveys and censuses providing data on years of schooling; testing scores on language, math, and science; and health levels related to economic productivity.
Monitoring the production of human capital can facilitate a mechanism to hold governments and donors accountable for investments in health and education.
Dr. Christopher Murray, director of IHME at the University of Washington said:
- Our findings show the association between investments in education and health and improved human capital and GDP – which policymakers ignore at their own peril.
- Human capital grows increasingly important for stimulating local and national economies as the world economy grows increasingly dependent on digital technology, from agriculture to manufacturing to the service industry,.
- Underinvesting in people may be driven by lack of policy attention to the levels of human capital.
- No regular, comparable reporting across all countries on human capital currently exists. Such reporting over the next generation – as a way to measure investments in health and education – will enable leaders to be held accountable to their constituents.
The study based on analysis of data from sources, including government agencies, schools, and health care systems showed that India is falling behind in terms of health and education of its workforce, which could potentially have long-term negative effects on the Indian economy.
India’s rankling of 158th in 2016 comes from having seven years of expected human capital, measured as the number of years a person can be expected to work in the years of peak productivity, taking into account life expectancy, functional health, years of schooling, and learning.
As per the study, “Learning is based on average student scores on internationally comparable tests. Components measured in the functional health score include stunting, wasting, anaemia, cognitive impairments, hearing and vision loss, and infectious diseases such as HIV/AIDS, malaria, and tuberculosis”.
Health and education advocates, economists, and others should use the findings as evidence to argue for greater attention to, and resources for, improving their nations’ human capital.
Researchers found that nations with greater improvements in human capital also tend to have faster growth in per capita GDP.
