Unraveling the World Bank’s Human Capital Index Report 2019
The inaugural Human Capital Index (HCI) report was released by the World Bank as part of the World Development Report 2019, under the theme “The Changing Nature of Work”. Notably, the HCI placed India at the 115th position, lower than Nepal, Sri Lanka, Myanmar, and Bangladesh. This article will delve into the details of the HCI, its hallmarks, implications on the global stage, and especially its assessment of India.
Understanding Human Capital
Human capital is comprised of knowledge, skills, and health, which individuals accumulate over their lifetime. This accumulated capital enables them to fulfil their potential as productive members of society. In consonance with this report, the World Bank launched the Human Capital Project (HCP), intending to advocate, measure, and analyse, thereby raising awareness and demand for interventions to build human capital.
Components of the Human Capital Project
The HCP consists of three main aspects: a human capital measurement metric known as the HCI, a programme for measurement and research to inform policy actions, and a programme aimed at supporting country strategies to boost investment in human capital.
The Human Capital Index
The HCI is designed to measure the human capital attainable by a child born today by the age of 18. It also examines the consequences of neglecting investments in human capital in terms of the potential productivity loss for future generations of workers. The index has been constructed for 157 countries.
Parameters of the HCI
The HCI is constituted by three components: survival, measured by under-5 mortality rates; expected years of Quality-Adjusted School which fuses information on the quantity and quality of education, and health environment, gauged by adult survival rates and the rate of stunting for children under age 5.
Distinguishing the HCI from the Human Development Index (HDI)
While the HDI is published by the UN Development Program, the HCI comes from the World Bank. There are key differences in their measurement parameters, such as survival rates and stunting rate used as health indicators in HCI as opposed to life expectancy in HDI. Also, HCI uses quality-adjusted learning instead of mere years of schooling as an education measure. Finally, per capita income is incorporated in HDI but not in HCI.
| Indexes | Health Indicators | Education Measure | Economical Parameter |
|---|---|---|---|
| HDI | Life Expectancy | Years of Schooling | Per Capita Income |
| HCI | Survival Rates, Stunting Rate | Quality-adjusted Learning | None |
Global Findings of the Report
The HCI measures the Index outcomes for each country as a fraction of the maximum score of 1. Advanced economies like North America and Europe have achieved HCI value above 0.75, while South Asia and Sub-Saharan Africa record the lowest HCI figures. Singapore excelled with its universal healthcare system, education examination results, and life expectancy, followed by South Korea, Japan, Hong Kong, and Finland.
India’s Performance in the Report
With an estimated HCI of 0.44, several key observations about India were made in the report. For instance, the Report points out that a child born in India today will only be 44% as productive when she grows up as she could be if she enjoyed complete education and full health. It also highlights India’s progress and challenges in crucial areas such as survival rate, expected years of school, test scores, learning-adjusted years of school, adult survival rate, healthy growth, and gender differences.
India’s Rejection of the HCI
The Government of India chose to dismiss the HCI, citing significant methodological weaknesses and data gaps in the index. According to the government, the HCI score for India fails to reflect the impact of key initiatives undertaken by the government to enhance human capital. It criticised the use of enrolment rates reported by UNESCO for the schooling parameter and harmonized test scores from various student achievement testing programs. Instead, it suggested the utilization of each country’s assessments of elementary education. Discrepancies in the collected data, lack of consideration for governance issues, political systems, socio-cultural context, among others, were also pointed out by India.
