HUMAN CAPITAL

PROJECT AND INDEX

Azerbaijan Human Capital ForumDecember 19-21, 2018

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Years of Schooling are not the same as LearningAverage years of schooling of 25-29 year olds, unadjusted and adjusted for learning

Years

of sc

ho

oling

World Development Report 2019

THE CHANGING NATURE OF WORK

http://www.worldbank.org/en/publication/wdr2019

570,000 downloads and counting

The changing nature of work

Technological Progress

Can Expand Job

Opportunities

Technological Change Is

Making Jobs More Intensive

In Non-routine Cognitive

Tasks

Stronger Social

Protection: Protect

People, Not Jobs

Advanced and Socioemotional

Skills are Becoming more

Important

Technology Is Changing How People

Work And The Terms On Which They

Work

Estimates Of The Percentage Of Jobs At

Risk From Automation Vary Widely

7

Source: WDR 2019 based on World Bank (2016); Arntz, Gregory, and Zierahn (2016); David (2017); Hallward- Driemeier and Nayyar (2018)

Industrial Jobs are Falling in the West and

Rising in the East

What Governments Can Do?

Problem-solving

Learning

Communication

Personal

Social

Invest in Relevant Skills

Patrinos

Education 4.0?

1st

Schoolhouse, teacher, students

2nd

Collaboration, technology, facilitator

3rd

Connected, personalized, open access

4thLifelong learning driven by

autonomy & purpose

• Increasing educational attainment is expensive

• Increasing cognitive skills is difficult, developing countries lag far behind

• Evidence on how to improve non-cognitive skills is limited

Implications for education systems: challenges

The human capital project

A global effort to accelerate

more and better investments in

people for greater equity and

economic growth

Early health care and education

prepare children to succeed and

prosper as adults in a rapidly

changing world

Human Capital Index Measurement and

research

SURVIVAL

Children who don’t

survive don’t grow

up to become future

workers

SCHOOL

Contribution of quality-adjusted years of

school to productivity

of future workers

HEALTH

Contribution of health

(average of adult

survival rate and

stunting) to productivity

of future workers

Human Capital Index

SURVIVALWill children born today survive to school age?

SCHOOL How much school will they complete and how much will they learn?

HEALTHWill they leave school in good health, ready for further learning and/or work?

How much human capital can a child born today expect to acquire by age 18, given the risks to poor health and poor education that prevail in the country where she lives?

Three ingredients reflect building blocks

of the next generation’s human capital:

Human Capital Index: The Story

SURVIVAL

HUMAN CAPITAL INDEX: Distance To Frontier

SCHOOL HEALTH HCI

x =x

Children who don’t survive

don’t grow up to become future

workers

Contribution of quality-adjusted years of school to

productivity of future workers

Contribution of health (adult

survival rate and stunting) to

productivity of future workers

Productivity of a future worker

(relative to benchmark of

complete education and full

health)

17

The Human Capital Index 2018

Source: World Bank staff ca lculations

537 538 538 542 545 548562 563 563

581

Learning Outcomes: Top HLO (Harmonized Learning Outcomes) Performers

Azerbaijan

Azerbaijan Performs Below Average of itsIncome Group

Azerbaijan currently ranks 69 out of 157 countries

In HCI, Performs BELOW Its Income Level

Learning Gap

Unpacking The Human Capital Index For Azerbaijan

Indicator AzerbaijanEurope & Central

Asia

HCI Component 1: Survival

Probability of Survival to Age 5 0.977 0.993

HCI Component 2: School

Expected Years of School 11.6 13.0

Harmonized Test Scores 472 495

HCI Component 3: Health

Survival Rate from Age 15-60 0.872 0.900

Fraction of Children Under 5 Not Stunted 0.820 0.881

Human Capital Index (HCI) 0.60 0.70

Azerbaijan performs average, given its level of economic development

AUS

KHM

HKGJPNMAC

MYS

MNG

NZL

SGP

TWN

THA

VNM

ALBARM

Azerba…

BEL

BGR HRV CYPCZE

EST FIN

FRA

GEO

GRC

HUNISL

IRL

ITA

KAZ

XKX

KGZ

LVALTU

LUX

MKD

MDA MNE

NLDNOR

POLPRT

ROU

RUSSRB

SVK

SVNESP

CHE

TJKTUR

UKR

GBR

DZA

BHR

ISR

KWT

MLT

OMN QAT

SAU

ARE

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arm

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ized

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-A

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all s

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GDP Per capita in 2017 or latest PPP (constant 2011 international USD), World Bank Thousands

East Asia PacificMiddle East and North AfricaEurope and Central AsiaSub - Saharan Africa

Quality of education has improved, but still lags around 1.5 years of schooling behind the EU

418

402

456

472

515

350

400

450

500

550

2000 2002 2004 2006 2008 2010 2012 2014 2016

Har

mo

niz

ed L

earn

ing

Ou

tco

mes

Azerbaijan Poland Georgia EU OECD

EU

Azerbaijan

Adjusted years of schooling in Azerbaijan is 3 years lower than the expected years of schooling

Iran, Islamic Rep.

Turkey Azerbaijan

Russian FederationIrelandPoland

Finland Japan Korea, Rep.

Singapore

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Year

s o

f Sch

oo

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Expected Years of School Learning-Adjusted Years of School

There are large inequalities between the richest and poorest students

532

436

483

435

479

466

400 420 440 460 480 500 520 540

Richest 20 Percent

Poorest 20 Percent

Urban

Rural

Girls

Boys

Priorities for Reform

(1) Invest in high-quality early educationParticipation in pre-primary education is low despite paying dividends on cognitive and

social skills

Net enrollment rate in pre-primary education, 2015 or latest

Source: WB staff based on Unesco UIS (2018)Note: Chi ldren aged 3-5 years old in Azerbaijan.

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57

83

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40

60

80

100

(2) Increase relevance of educationLarge percentage of employers had problems to hire due to lack of skilled workers

Azerbaijan. Percentage of employers that had problems trying to hire due to lack of skilled workers (last 12 months)

Source: WB staff ca lculations based on Azerbaijan Employer STEP Survey 2013

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0 10 20 30 40 50

Service workers

Elementary occupation

Clerical support workers

Sales workers

Technicians

Craft workers

Operators and assemblers

Professionals

Managers

(3) Prioritize investment in EducationExpenditure on education is among the lowest in the region

2.9

4.9 5.3

0

2

4

6

8

Expenditure as a share of the GDP, 2015 or latest

Source: WB staff based on Unesco UIS (2018)

COUNTRY ENGAGEMENT

Measurement & Research Agenda

• How to invest in human capital

• Create public demand for human capital investments

• Expand coverage of the Index

• More measurement at sub-national levels

• Better understand the process of human capital accumulation

• Assess the quality of delivery systems in each country

HCP Countries: 28 and Growing!

Armenia Morocco

Bhutan Pakistan

Costa Rica Papua New Guinea

Egypt Peru

Ethiopia Philippines

Georgia Poland

Indonesia Rwanda

Iraq Saudi Arabia

Jordan Senegal

Kenya Sierra Leone

Kuwait Tunisia

Lesotho Ukraine

LebanonUnited Arab Emirates

Malawi Uzbekistan

What are HCP Countries Planning?

• Identifying national priorities using a “whole of government” approach

• Broadening efforts beyond individual sectors

• Tackling human capital development barriers in all their manifestations

• Assessing coverage of key measurement and program interventions

• Knowledge sharing through an HCP Network

HCP Countries are Interested in:

Addressing persistent challenges…

Improving service delivery approaches…

• Investing in the Early Years (stunting, ECD, child mortality, etc.)

• Universal Health Care/Community Health Programs (especially for non-communicable diseases)

• Improve Learning Outcomes

• Demographic Linkages/Issues

• Jobs Agenda

• Women Empowerment

• Youth Engagement

• Sustainable Development for HC

• Pro-Poor HC Policies and Programs.

• Whole-of-Government Approach

• Private Sector Engagement

• Domestic Resource Utilization and Mobilization (DRUM)

• Measurement for Data-Driven Policymaking

• Service Delivery/Governance

• Innovation/Technology

@hpatrinos

Harry Anthony Patrinos World Bank