SEATTLE, Washington — Human Capital has long been regarded as a pivotal factor in the economic growth of countries and the success of poverty reduction efforts. Investing in health and education can not only improve efficiency but also reduce inequality and benefit marginalized communities. The ongoing COVID-19 pandemic has caused a severe depreciation in human capital. Protecting human capital during COVID-19 is vital to ensure stable economic recovery and maintain global development progress.
What Is Human Capital?
Human capital is the accumulated health, knowledge, skill sets and experiences a person acquires throughout their lifetime, determining their level of productivity in society. Human capital is correlated to a country’s economic growth and determines the prosperity of the world’s next generation of innovators, problem solvers, leaders and teachers. The potential of human capital is astounding. Simply investing in people through health care, nutrition, education and skills training, can end extreme poverty and foster inclusive societal growth.
Human Capital Index (HCI)
The World Bank’s Human Capital Index (HCI) is a summary measure of the amount of human capital that a child born today can expect to acquire by age 18, given the risks of poor health and poor education that prevail in the country where he/she lives. The index is then used to analyze a country’s economic losses when a population’s potential is not fully harnessed.
COVID-19: A Human Capital Crisis
The COVID-19 pandemic has given rise to an acute economic crisis. The collapse of supply chains, disruptions to essential services and the rise in food prices, threaten to crumble hard-won gains in human capital development. Although the entire world has experienced some form of economic disruption, lower-income countries are disproportionately affected and face severe humanitarian consequences. With more at-risk populations and fewer resources, low-income countries are suffering from rising poverty, malnutrition and infectious diseases.
The COVID-19 pandemic’s economic disruption has decreased foreign demand and reduced commodity prices, leaving many lower-income countries shut out of global financial markets. Social distancing measures have reduced the domestic labor supply and demand and drastically increased transaction costs, leaving many out of work and unable to access essential goods and services. During such an unprecedented time, protecting human capital is crucial in ensuring the survival and economic recovery of billions of people around the world.
The World Bank has urged countries to invest in long-term strategies that protect human capital and a recent report reminded countries that “saving lives and livelihoods today must be balanced with preparing for an effective, resilient and equitable recovery tomorrow.” Global partners have been addressing this need, working vigorously to protect human capital through online education, healthcare and youth employment.
Online Education Initiatives
With many schools shut down due to social-distancing measures, low-income countries have experienced high levels of learning loss that will drastically affect future productivity. A variety of resources have been swiftly implemented to provide remote education technologies as well as school meal alternatives. UNICEF has been instrumental in keeping schools safe and children learning throughout the pandemic. For example, in Côte d’Ivoire UNICEF has collaborated with the Ministry of Education to make school accessible for children at home and online, taping lessons to be aired on national television.
Health and Survival Programs
Ensuring the survival of children is essential to protecting human capital during COVID-19. Save The Children was one of the first organizations to distribute hygienic supplies to communities and provide crucial information on how to prevent the spread of infection.
During the pandemic, health systems in low-income countries have been overwhelmed and resources have been prioritized to combat the spread of COVID-19. Although fighting the pandemic is essential, vaccinations and preventative measures for other diseases cannot be neglected. According to the Centers for Disease Control (CDC), the disruption of immunization services during the COVID-19 pandemic threatens to bring back vaccine-preventable diseases like polio and measles. The World Health Organization (WHO) is delivering essential supplies to immunization programs around the world to sustain vaccination efforts throughout the pandemic.
Unemployment and the Youth
The onset of COVID-19 has drastically increased levels of youth unemployment. Countries risk losing a generation of skilled human capital as youth unemployment rises, a key factor in economic growth and recovery post-pandemic. “Cash for Work” programs are being implemented around the world to minimize the socio-economic impacts of the pandemic. The World Food Programme (WFP) has helped more than 15,000 people in eastern Tajikistan during the COVID-19 pandemic, providing short-term employment for infrastructure development labor. In addition to helping families meet their basic needs, these types of programs stimulate markets and lead to long-term community development.
Providing youth with relevant skills during the pandemic can also increase employment. World Learning’s Algeria Entrepreneurship & Employment Project has been incredibly influential in providing youth employment training during the pandemic, pivoting its focus towards industries with employment resilience and digital skills training.
Protecting human capital during COVID-19 is essential for stable economic recovery. During unprecedented global health emergencies and economic crises, long-term strategies aiding in the health, education and employment of people in low-income countries are helping to protect the future of human capital.
– Claire Brenner