Human Capital Index [HCI]

By : Neha Dhyani

Updated : Feb 28, 2023, 10:27

The World Bank recently released the Human Capital Index [HCI] report for 2020. The Index compares critical aspects of human capital in different countries. In the HCI 2020, India is placed 116th out of 180 countries.

Methodology of Calculating Human Capital Index [HCI]

In an article published in the leading scientific journal Nature, Noam Angrist, Simeon Djankov, Pinelopi Koujianou Goldberg, and Harry Patrinos propose applications for evaluating human capital. In a 2021 Vox post, these findings are promoted.

The following three pillars support the Human Capital Index [HCI] -

  • Survival
  • School
  • Health

Key Points of the Human Capital Index [HCI]

  • Human capital is made up of people's knowledge, skills, and health throughout their lives, allowing them to reach their full potential as contributing members.
  • HCI Parameters: The HCI 2020 comprises statistics on children's health and education from 174 nations up to March 2020. As a result, a pre-pandemic baseline can be established.
  • It encompasses 98 per cent of the global population.

Before the pandemic, most nations had made steady progress in developing children's human capital, with low-income countries making the most improvement.

Despite this development, a kid born in a specific country may expect to acquire only 56% of their potential human capital when measured against comprehensive schooling and good health criteria.

Human Capital Index [HCI] - The Pandemic Effect

  • The pandemic jeopardizes a decade of progress in human capital development, including advances in health, survival rates, school enrolment, and stunting reduction.
  • More than a billion youngsters have missed school and could lose up to half a year of education.
  • It has caused significant interruptions in essential health services for women and children, with many children missing out on vital immunizations.
  • It has widened income disparities and had an especially negative economic impact on women and the poorest households, exposing them to food insecurity and poverty.

Human Capital Index [HCI] - India's Ranking

India was placed 115th out of 157 countries in 2019. In 2020, India is ranked 116th out of 174 countries. On the other hand, India improved its score from 0.44 in 2018 to 0.49 in 2020.

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List of the top 5 Countries by Human Capital Index [HCI]

A list of the top countries with their ranks are listed below:

  • Singapore: 0.88
  • Hong Kong: 0.81
  • Japan: 0.80
  • South Korea: 0.80
  • Canada: 0.80

List of the Bottom 5 Countries by Human Capital Index [HCI]

A list of the worst-performing countries is listed below:

  • Niger: 0.29
  • Chad: 0.30
  • South Sudan: 0.31
  • Mali: 0.32
  • Liberia: 0.32

India is an average performer with a score of 0.49.

The Way Forward

  • The HCI provides a foundation for the Indian government to prioritize and a dimension to promote human capital.
  • The World Bank is collaborating with India to support poor people's livelihoods. Given recent improvements, it appears to be more significant for the time being due to Covid-19.
  • People must be protected and invested in as countries try to establish the groundwork for long-term, inclusive recovery and future growth.

The Human Capital Index [HCI] is a very important metric to understand the performance of the nations. India was ranked 116th in the Human Capital Index [HCI] report, and it needs to improve its overall standing in the report.

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FAQs on Human Capital Index [HCI]

Q1. Which country was ranked first in the Human Capital Index [HCI] report?

Singapore was ranked first on the Human Capital Index [HCI].

Q2. Which country was ranked last in the Human Capital Index [HCI]?

Niger was ranked last in the Human Capital Index [HCI] Report.

Q3. Where was India ranked in the Human Capital Index [HCI]?

India ranked 116th out of 180 nations on the Human Capital Index [HCI].

Q4. What is the range of the Human Capital Index [HCI]?

The Human Capital Index [HCI] score ranges from 0 to 1.