The recent report titled “Collapse and Recovery: How COVID-19 Eroded Human Capital and What to Do” by the World Bank has shed light on the substantial impact of the Covid-19 pandemic on human capital, primarily affecting children and young people. The report serves as a comprehensive analysis of global data, focusing on the pandemic’s impacts on crucial developmental stages in the lives of young individuals including early childhood (0-5 years), school-age (6-14 years), and youth (15-24 years).
Understanding Human Capital
Human capital refers to the accumulation of knowledge, skills, and health that individuals garner throughout their lives. This accumulation enables them to harness their potential, becoming productive members of society.
Key Findings of the Report
The report paints a grim picture of how the pandemic has disrupted human capital, especially in the context of underdeveloped and developing nations. It has caused significant damage at critical stages of life cycles, putting the development of millions in low- and middle-income countries off track.
Impact on School Children
The academic achievements of preschool-age children have been notably affected. They have reportedly lost more than 34% of learning in early language and literacy, and over 29% in mathematics compared to pre-pandemic cohorts. Despite re-opening of schools, preschool enrollment witnessed a decline of more than 10% by the end of 2021 in multiple countries. The report further highlights the increase in food insecurity faced by children during the pandemic.
Healthcare Reductions Among Children
Millions of children have had reductions in healthcare access, including missed critical vaccines. They have also experienced increased stress in their care environments, leading to decreases in school readiness and social-emotional development.
Youth Employment Crisis
The pandemic worsened youth unemployment trends, with 40 million people who would have been employed being jobless at the end of 2021. Youth earnings contracted by 15% in 2020 and 12% in 2021. In countries like Brazil, Ethiopia, Mexico, Pakistan, South Africa, and Vietnam, 25% of all young people were neither in education, employment, nor training in 2021.
Future Challenges
The report forecasts a potential 25% decline in earnings at prime working age due to the current cognitive deficits in toddlers. Covid-related education shocks can lead low- and middle-income students to lose up to 10% of their future average annual incomes. Globally, this generation of students is at risk of losing USD 21 trillion in potential lifetime earnings – a loss that could trigger lower productivity, greater inequality, and possible social unrest for decades.
Recommendations from the Report
The report urges countries to act swiftly to recover these losses and make better investments in people. Human capital is a key driver of poverty reduction and inclusive growth, playing a crucial role in building resilience against current and future crises and shocks.
Policy actions suggested include vaccinations, nutritional supplementation campaigns, increasing coverage of parenting programs, and access to pre-primary education. For youth, the report recommends support for adapted training, job intermediation, entrepreneurship programs, and new workforce-oriented initiatives.
In the long term, building agile, resilient, and adaptive human development systems will be essential to prepare for and respond to current and future shocks. This serves as a prompt reminder for nations worldwide to reassess their strategies for investing in their most valuable asset – human capital.
Last Modified: February 20, 2024