Publication:
Measuring Human Capital in Middle Income Countries

No Thumbnail Available
Date
2022-12
ISSN
Published
2022-12
Editor(s)
Abstract
This paper develops an indicator that measures the level of human capital to address the specific education and health challenges faced by middle income countries. We apply this indicator to countries in Europe and Central Asia, where productive employment requires skills that are more prevalent among higher education graduates, and where good health is associated to low levels of adult health risk factors. The Europe and Central Asia Human Capital Index (ECA-HCI) extends the World Bank's Human Capital Index by adding a measure of quality-adjusted years of higher education to the original education component, and it includes the prevalence of three adult health risk factors—obesity, smoking, and heavy drinking—as an additional proxy for latent health status. The results show that children born today in the average country in Europe and Central Asia will be almost half as productive as they would have had they reached the benchmark of complete education and full health. Countries with good basic education outcomes do not necessarily have good higher education outcomes, and high prevalence of adult health risk factors can offset good education indicators. This extension of the Human Capital Index could also be useful for assessing the state of human capital in middle-income countries in general.
Link to Data Set
Associated URLs
Report Series
Other publications in this report series
Journal
Journal Volume
Journal Issue

Related items

Showing items related by metadata.

  • Publication
    Measuring Human Capital in Europe and Central Asia
    (World Bank, Washington, DC, 2020-10) Torre, Ivan; Demirguc-Kunt, Asli; Torre, Iván
    This paper outlines an extension of the Human Capital Index that addresses the specific challenges in education and health faced by countries in Europe and Central Asia. Good basic education will not be enough, as job markets today demand higher levels of human capital than in the past. As the region’s population becomes older, it is important that adults remain healthy to ensure productive aging. The Europe and Central Asia Human Capital Index (ECA-HCI) extends the Human Capital Index by adding a measure of quality-adjusted years of higher education to the original education component, and it includes the prevalence of three adult health risk factors -- obesity, smoking, and heavy drinking -- as an additional proxy for latent health status. This extension of the Human Capital Index could also be useful for assessing the state of human capital in middle-income countries in general.
  • Publication
    Protect Incomes or Protect Jobs? The Role of Social Policies in Post-Pandemic Recovery
    (World Bank, Washington, DC, 2022-09) Demirgüç-Kunt, Asli; Lokshin, Michael; Torre, Iván
    This paper examines the effectiveness of income protection and job protection policies for the post-pandemic economic recovery of the second half of 2020 through 2021. The paper is based on a new data set of the budgets of social protection programs implemented as a part of the pandemic stimulus package in 154 countries. The empirical analysis shows that, in the short run, higher expenditure on job protection measures is associated with more robust gross domestic product growth, increased employment, and decreased inactivity and poverty rates compared to the expansion of income protection programs. Both policies had a significant economic impact only in countries with weaker pre-pandemic social insurance systems. In countries with broader coverage of the social insurance system, the income and job protection programs appear to have had a limited impact on post-pandemic recovery. Because the structural economic changes induced by the pandemic are expected to materialize fully in several years, more research is needed to understand the longer-term effects of job protection and income protection policies on labor markets and economic recovery.
  • Publication
    Opening-up Trajectories and Economic Recovery
    (World Bank, Washington, DC, 2020-11) Torre, Ivan; Demirguc-Kunt, Asli; Lokshin, Michael; Torre, Iván
    This paper analyzes the reopening process of countries in Europe and Central Asia after the first wave of the COVID-19 pandemic and provides evidence on the effects of different reopening trajectories and their timing and speed on economic recovery. The analysis indicates that countries that adopted a gradual, staged reopening experienced stronger economic recovery compared with the countries that rushed into lifting the restrictive measures before the pandemic was under control. Postponing lifting the restrictions until after the pandemic's peak was reached has a positive impact on economic activity. Governance also matters: a higher level of trust in government is associated with increased economic activity among countries that carried out a gradual reopening process. There is also suggestive evidence that providing people objective data on the progress of the pandemic may speed up the recovery process.
  • Publication
    The Sooner, the Better
    (World Bank, Washington, DC, 2020-05) Demirguc-Kunt, Asli; Lokshin, Michael; Torre, Iván
    The size of the economic shocks triggered by the COVID-19 pandemic and the effects of the associated non-pharmaceutical interventions have not been fully assessed, because the official economic indicators have not been published. This paper provides estimates of the economic impacts of the non-pharmaceutical interventions implemented by countries in Europe and Central Asia over the initial stages of the COVID-19 pandemic. The analysis relies on high-frequency proxies, such as daily electricity consumption, nitrogen dioxide emission, and mobility records, to trace the economic disruptions caused by the pandemic, and calibrates these measures to estimate magnitude of the economic impact. The results suggest that the non-pharmaceutical interventions led to about a decline of about 10 percent in economic activity across the region. On average, countries that implemented non-pharmaceutical interventions in the early stages of the pandemic appear to have better short-term economic outcomes and lower cumulative mortality, compared with countries that imposed non-pharmaceutical interventions during the later stages of the pandemic. In part, this is because the interventions have been less stringent. Moreover, there is evidence that COVID-19 mortality at the peak of the local outbreak has been lower in countries that acted earlier. In this sense, the results suggest that the sooner non-pharmaceutical interventions are implemented, the better are the economic and health outcomes.
  • Publication
    Finance, Inequality, and Poverty: Cross-Country Evidence
    (World Bank, Washington, DC, 2004-06) Levine, Ross; Beck, Thorsten; Demirguc-Kunt, Asli
    While substantial research finds that financial development boosts overall economic growth, the authors study whether financial development is pro-poor: Does financial development disproportionately raise the income of the poor? Using a broad cross-country sample, the authors find that the answer is yes: Financial intermediary development reduces income inequality by disproportionately boosting the income of the poor and therefore reduces poverty. This result is robust to controlling for simultaneity bias and reverse causation.

Users also downloaded

Showing related downloaded files

  • Publication
    Morocco Economic Update, Winter 2025
    (Washington, DC: World Bank, 2025-04-03) World Bank
    Despite the drought causing a modest deceleration of overall GDP growth to 3.2 percent, the Moroccan economy has exhibited some encouraging trends in 2024. Non-agricultural growth has accelerated to an estimated 3.8 percent, driven by a revitalized industrial sector and a rebound in gross capital formation. Inflation has dropped below 1 percent, allowing Bank al-Maghrib to begin easing its monetary policy. While rural labor markets remain depressed, the economy has added close to 162,000 jobs in urban areas. Morocco’s external position remains strong overall, with a moderate current account deficit largely financed by growing foreign direct investment inflows, underpinned by solid investor confidence indicators. Despite significant spending pressures, the debt-to-GDP ratio is slowly declining.
  • Publication
    Europe and Central Asia Economic Update, Spring 2025: Accelerating Growth through Entrepreneurship, Technology Adoption, and Innovation
    (Washington, DC: World Bank, 2025-04-23) Belacin, Matias; Iacovone, Leonardo; Izvorski, Ivailo; Kasyanenko, Sergiy
    Business dynamism and economic growth in Europe and Central Asia have weakened since the late 2000s, with productivity growth driven largely by resource reallocation between firms and sectors rather than innovation. To move up the value chain, countries need to facilitate technology adoption, stronger domestic competition, and firm-level innovation to build a more dynamic private sector. Governments should move beyond broad support for small- and medium-sized enterprises and focus on enabling the most productive firms to expand and compete globally. Strengthening competition policies, reducing the presence of state-owned enterprises, and ensuring fair market access are crucial. Limited availability of long-term financing and risk capital hinders firm growth and innovation. Economic disruptions are a shock in the short term, but they provide an opportunity for implementing enterprise and structural reforms, all of which are essential for creating better-paying jobs and helping countries in the region to achieve high-income status.
  • Publication
    Argentina Country Climate and Development Report
    (World Bank, Washington, DC, 2022-11) World Bank Group
    The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.
  • Publication
    World Development Report 2006
    (Washington, DC, 2005) World Bank
    This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.
  • Publication
    Classroom Assessment to Support Foundational Literacy
    (Washington, DC: World Bank, 2025-03-21) Luna-Bazaldua, Diego; Levin, Victoria; Liberman, Julia; Gala, Priyal Mukesh
    This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.