Human Capital Index 2020

Human Capital Index 2020

Context:

World Bank has released the Human Capital Index 2020. 

Human Capital Index

  • The 2020 Human Capital Index update includes health and education data for 174 countries – covering 98% of the world’s population – up to March 2020.
    • The index provides a pre-pandemic baseline on the health and education of children, with the biggest strides made in low-income countries.
    • The analysis shows that pre-pandemic, most countries had made steady progress in building the human capital of children, with the biggest strides made in low-income countries.
  • Despite this progress, and even before the effects of the pandemic, a child born in a typical country could expect to achieve just 56% of their potential human capital, relative to a benchmark of complete education and full health.
  • 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 has been particularly deep for women, poor families, and COVID leaving many vulnerable to food insecurity and poverty.

Key Takeaways

  • India has been ranked at the 116th position in the latest edition. However, India’s score increased to 0.49 from 0.44 in 2018. 
    • In 2019, India had raised “serious reservations” over the Human Capital Index, wherein India was ranked 115 out of 157 countries. This year India finds itself at 116th from among 174 countries.
  • The Index provides a basis on which the government can prioritize and a dimension to support human capital. 
  • Data also shows disruptions to essential health services for women and children, with many children missing out on crucial vaccinations.
  • Eighty million children are missing out on essential vaccinations. More than a billion children have been out of school due to Covid-19. And that could lose as much as USD 10 trillion in lifetime earnings because of the reduced learning, the school closing and the potential for dropping out of school, and the disproportionate impact on girls.

Impact of COVID:

  • The coronavirus has deepened inequality globally, in addition to increasing poverty and distress. 
  • Due to the COVID, more than 1 billion children have been out of school and could lose out half a year of schooling.
  • The impact of Covid-19, on developing countries particularly has been hard, there is the collapse of the formal and informal market, and also there is a very limited social safety net. The World Bank estimates a 12% drop in employment.
  • There has been a major decline in remittances and total income is going down by 11 or 12%. All this is likely to have a disproportionate effect on the poor and on women.

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