LONDON (Thomson Reuters Foundation) - Governments should invest in healthcare and education for children in order to boost economic growth, the World Bank urged on Thursday.
More than half of all children born this year will lose half of their potential lifetime earnings due to poverty, poor health and a lack of education, according to the World Bank’s Human Capital Index.
The global institution defined human capital as a person’s knowledge, wellbeing and skills accumulated over a lifetime.
“Human capital is a key driver of sustainable, inclusive economic growth, but investing in health and education has not gotten the attention it deserves,” World Bank Group President Jim Yong Kim said in a statement.
The institution noted that the development of human capital was key to reducing poverty and boosting economic growth throughout the 20th century, especially in countries in East Asia.
Yet many governments are neglecting human capital, which will be “critical” to succeed in the economy of the future, according to the report.
The authors noted that investing in human capital makes people more productive, flexible and innovative - skills that have become increasingly important as workplaces evolved in response to rapid technological change.
“This index creates a direct line between improving outcomes in health and education, productivity and economic growth,” Kim said.
“I hope that it drives more countries to take urgent action and invest more - and more effectively - in their people.”
By analyzing indicators such as child mortality, education rates and health, the World Bank report found that 56 percent of children born around the world this year will reach only half their earning potential.
The survey ranked 157 countries according to how productive their next generation of workers are likely to be.
Chad, South Sudan and Niger were at the bottom of the list, while Singapore, South Korea and Japan came at the top.
Countries that scored 0.5 out of 1 on the index - meaning they are losing half of their future economic potential - were estimated to lose 1.4 percent in annual economic growth over 50 years, the report said.
In contrast, if children born in countries like Azerbaijan, Ecuador and Thailand - which all scored 0.6 - were to receive full quality education and healthcare, they would be 40 percent more productive by the time they entered the workforce.
Reporting by Lin Taylor @linnytayls, Editing by Jared Ferrie; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters that covers humanitarian issues, conflicts, land and property rights, modern slavery and human trafficking, gender equality, climate change and resilience. Visit http://news.trust.org to see more stories