Measuring human capital: a systematic analysis of 195 countries and territories, 1990–2016

Abstract

Human capital is recognized as the level of education and health in a population and is considered an important determinant of economic growth. The World Bank has called for measurement and annual reporting of human capital to track and motivate investments in health and education and enhance productivity. We aim to provide a new comprehensive measure of human capital across countries globally.

Methods

We generated a period measure of expected human capital, defined for each birth cohort as the expected years lived from age 20 to 64 years and adjusted for educational attainment, learning or education quality, and functional health status using rates specific to each time period, age, and sex for 195 countries from 1990 to 2016. We estimated educational attainment using 2,522 censuses and household surveys; we based learning estimates on 1,894 tests among school-aged children; and we based functional health status on the prevalence of seven health conditions, which were taken from the Global Burden of Diseases, Injuries, and Risk Factors Study 2016 (GBD 2016). Mortality rates specific to location, age, and sex were also taken from GBD 2016.

Findings

In 2016, Finland had the highest level of expected human capital of 28.4 health-, education-, and learning-adjusted expected years lived between age 20 and 64 years (95% uncertainty interval 27.5–29.2); Niger had the lowest expected human capital of less than 1.6 years (0.98–2.6). In 2016, 44 countries had already achieved more than 20 years of expected human capital; 68 countries had expected human capital of less than 10 years. Of 195 countries, the 10 most populous countries in 2016 for expected human capital were ranked: China at 44, India at 158, USA at 27, Indonesia at 131, Brazil at 71, Pakistan at 164, Nigeria at 171, Bangladesh at 161, Russia at 49, and Mexico at 104. Assessment of change in expected human capital from 1990 to 2016 shows marked variation from less than two years of progress in 18 countries to more than five years of progress in 35 countries. Larger improvements in expected human capital appear to be associated with faster economic growth. The top quartile of countries in terms of absolute change in human capital from 1990 to 2016 had a median annualized growth in gross domestic product of 2.60% (IQR 1.85–3.69) compared with 1.45% (0.18–2.19) in the bottom quartile.

Interpretation

Countries vary widely in the rate of human capital formation. Monitoring the production of human capital can facilitate a mechanism to hold governments and donors accountable for investments in health and education.