In the News

World Bank launches new human capital index

Graham Watson

14th October 2018

The World Bank has launched a new developmental index designed to measure the extent to which economies invest in health and education, so as to make the most of their human capital. It is hoped that this will shame certain countries into improving their provision in these sectors.

However, at first glance, I don't think that it actually tells us very much - the countries at the bottom are also, unsurprisingly, at the bottom of the UN's Human Development Index too. The only possible plus that I see, is that it might change the emphasis on approaches to development, but even then only at the margin.


  • Human capital refers to skills, experience, attitudes and aptitudes of the human input into production
  • In many countries, secondary & tertiary school enrolment is low and teaching quality / attendance is often poor
  • In many nations, there is a big gap between expected years of schooling and mean (actual) years of schooling
  • Between 10 and 30 percent of per capita income differences can be attributed to cross-country differences in human capital

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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