Schooling Is Not the Same as Learning

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.