Human Capital Index


The Human Capital Index is an annual measurement prepared by the World Bank. HCI measures which countries are best in mobilizing their human capital, the economic and professional potential of their citizens. The index measures how much capital each country loses through lack of education and health. The index ranges between 0 and 1, with 1 meaning maximum potential is reached. HCI is used in country studies of employment and wages, for example in Ukraine after Russia's invasion.

Methodology

The applications to measuring human capital were developed in research by Noam Angrist, Simeon Djankov, Pinelopi Koujianou Goldberg, and Harry Patrinos in the scientific journal Nature. These findings were popularized in a 2021 article. HCI is grounded on the following three pillars:
Survival
  • Percentage of children surviving past the age of 5
School
Health

History

The Human Capital Index was first published as part of the World Bank's World Development Report 2019, directed by Simeon Djankov and World Bank chief economist Federica Saliola. Nobel Prize winner Paul Romer started the measurement.