FeaturedInternationalVOLUME 16 ISSUE # 04

Human capital losses from pandemic

According to a new World Bank study, the COVID-19 pandemic threatens to wipe out all the gains in health and education made in the past decade, especially in the poorest countries. Investments in human capital—the knowledge, skills, and health that people accumulate over their lives—are the key to unlocking a child’s potential and to improving economic growth in every country. But all the human capital built over the last few years is in jeopardy because of the six-month lockdown across the globe.

The World Bank Group’s 2020 Human Capital Index includes health and education data for 174 countries – covering 98 percent of the world’s population – up to March 2020, providing a pre-pandemic baseline on the health and education of children. The analysis shows that pre-pandemic, most countries had made steady progress in building human capital of children, with the biggest strides made in low-income countries.

However, despite the progress, and even before the effects of the pandemic, a child born in a typical country could expect to achieve just 56 percent of their potential human capital, relative to a benchmark of complete education and full health. But according to World Bank Group President David Malpass, “The pandemic puts at risk the decade’s progress in building human capital, including the improvements in health, survival rates, school enrollment, and reduced stunting. The economic impact of the pandemic has been particularly deep for women and for the most disadvantaged families, leaving many vulnerable to food insecurity and poverty. Protecting and investing in people is vital as countries work to lay the foundation for sustainable, inclusive recoveries and future growth.”

The pandemic forced the closure of all human activities. As a consequence, more than 1 billion children have been out of school and could lose out, on average, half a year of schooling, adjusted for learning, translating into considerable monetary losses. Data collected so far also shows significant disruptions to essential health services for women and children, with many children missing out on crucial vaccinations.

The 2020 Human Capital Index also presents a decade-long overview of the evolution of human capital outcomes from 2010 through 2020. The analysis shows improvements across all regions and across all income levels. These were largely due to improvements in health, reflected in better child and adult survival rates and reduced stunting, as well as an increase in school enrollment.

But the progress has been put in the reverse gear by the global pandemic. The analysis finds that human capital outcomes for girls are on an average higher than for boys. However, it has not translated into comparable opportunities to use human capital in the labor market. Generally speaking, employment rates are 20 percentage points lower for women than for men, with a wider gap in many countries and regions. Moreover, the pandemic has increased the danger of gender-based violence, child marriage and adolescent pregnancy, all of which further reduce opportunities for learning and empowerment for girls.

Today, hard-won human capital gains in many countries are at risk. What is the way out? Expert opinion is that countries can do more than just work to recover the lost progress. To protect and extend earlier human capital gains, countries should take necessary steps to expand health service coverage and quality among marginalized communities, boost learning outcomes together with school enrollments, and support vulnerable families with need-based social protection measures.

On its part, the World Bank Group is working closely with governments to develop long-term solutions to protect and invest in people during and after the pandemic. In Ethiopia, Haiti and Mongolia, the bank has been supporting the acquisition of vital medical equipment. In Bangladesh, Burkina Faso, and Nepal, the bank is supporting the development of school safety and hygiene protocols while working with water supply, sanitation, and hygiene teams to provide basic sanitization and hygiene supplies.

In Jordan and Turkey, through recently approved new operations, the bank is supporting the development of TV and digital content for blended teaching and learning for the new academic year, as well as psycho-social counseling and remedial courses. In the Sahel region, the bank is backing the Sahel Women’s Economic Empowerment and the Demographic Dividend (SWEDD) project aimed at creating a favorable environment for women and girls’ empowerment through programs to keep girls in school, and to expand economic opportunities and access to quality reproductive health services.

In India, the bank is helping the government to scale up cash transfers and food benefits, using a set of pre-existing national platforms and programs, to provide social protection for essential workers involved in COVID-19 relief efforts; and benefit vulnerable groups, particularly migrants and informal workers, who face starvation and extreme privations.

New and imaginative policy measures in health, education, and social protection are needed to recover lost ground and pave the way for today’s children to surpass the human capital achievements and quality of life of the generations that preceded them.