Measuring human capital using global learning data

The notion of human capital was mentioned as early as in 1776 and formalized two centuries later. Ever since, researchers have explored the role of human capital in economic development. For decades, studies used measures of schooling as a proxy for human capital. This applies even to the most prominent index of human capital to date, the United Nation’s human development index (HDI).

However, using schooling as a proxy for human capital assumes that being in school translates to learning. Evidence suggests that this is often not the case. A recent analysis reveals that six out of ten adolescent individuals worldwide cannot meet basic proficiency levels in mathematics and reading. The gap between schooling and learning is acute in developing countries. In Kenya, Tanzania and Uganda, three-quarters of the students in grade 3 cannot read a basic sentence such as ‘the name of the dog is Puppy.’. In rural India, half of the students in grade 3 cannot solve a two-digit subtraction problem (such as 46 – 17).

These data from previous studies demonstrate a substantial gap in the formation of human capital: students are in school, but do not learn enough. Closing this gap is an important priority for economic development. Several studies have suggested that when human capital is measured by schooling, it does not deliver the returns predicted by growth models. However, when measured by learning, human capital is more strongly associated with growth.

To date, much of the effort to measure learning has focused on high-income countries. This limitation is due to the absence of comparable measures of learning in low- and middle-income countries. Existing measures exclude a considerable portion of the global distribution, in particular countries with the most potential to gain from the accumulation of human capital.

In this Article we bridge this gap. We introduce a database of globally comparable learning outcomes for 164 countries covering 98% of the global population from 2000 to 2017. This is one of the largest and most-current global learning databases, one of the first to disaggregate learning results by gender and to introduce methodological improvements such as the inclusion of standard errors to quantify uncertainty around mean scores. The database, referred to as the Harmonized Learning Outcomes (HLO) database, is available for public use and updates are expected every 2 to 3 years as new learning data become available (see ‘Data availability’in Methods). A large-scale effort to track the formation of human capital using this database is the World Bank’s new human capital index.

Of note, throughout this Article, we use the term ‘schooling’ when referring to the average years of schooling or average enrolment rates of a country at specific schooling levels. We use the term ‘learning’ when referring to the stock of basic cognitive skills, including mathematics, reading and science, as measured by standardized tests conducted in school.