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How is the Human Capital Index prompting action?

Jason Weaver's picture
Also available in: 中文 | Français | العربية | Español
Students at the Zanaki Primary School in Dar es Salaam, Tanzania. © Sarah Farhat/World Bank
Students at the Zanaki Primary School in Dar es Salaam, Tanzania. © Sarah Farhat/World Bank

Whew, it’s out!

On October 11, 2018, the World Bank Group released its inaugural Human Capital Index (HCI), a tool that quantifies the contribution of health and education to the productivity of a country’s next generation of workers. The question underpinning the HCI asks, “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?” Globally, 56 percent of children born today will lose more than half their potential lifetime earnings because governments and other stakeholders are not currently making effective investments to ensure a healthy, educated, and resilient population ready for the workplace of the future.

To drive urgent action on human capital development, the Bank Group’s Human Capital Project (HCP) is working on two other fronts beyond the Human Capital Index. These are Measurement & Research and Country Engagement.

The voice of investors – a new Investor Forum

Helen Martin's picture
Also available in: 中文 | Español
From left to right: World Bank Group President Jim Yong Kim; Canada’s Prime Minister Justin Trudeau; Neeti Bhalla, Executive Vice President and Chief Investment Officer for Liberty Mutual Insurance Group; Brian Moynihan, CEO, Bank of America and Hiromichi Mizuno, Executive Managing Director, Government Pension Investment Fund Japan (GPIF). Photo: © World Bank
From left to right: World Bank Group President Jim Yong Kim; Canada’s Prime Minister Justin Trudeau; Neeti Bhalla, Executive Vice President and Chief Investment Officer for Liberty Mutual Insurance Group; Brian Moynihan, CEO, Bank of America and Hiromichi Mizuno, Executive Managing Director, Government Pension Investment Fund Japan (GPIF). Photo: © World Bank

Institutional investors increasingly hold the world’s purse strings, with a growing share of private savings. What will it take for financiers to allocate more of that capital in ways that align with development goals—in the long-term investments, particularly in infrastructure, that are needed to help lift more people out of poverty and boost shared prosperity?
 
To answer that question, the World Bank Group and the Government of Argentina convened the first ever Investor Forum on the eve of the G20 Summit in Buenos Aires. The Investor Forum brought together investors holding over $20 trillion dollars of assets, finance experts, government representatives, and development partners for a frank and practical conversation.

Calling all innovators! Help achieve ‘Good ID’ for the world’s invisible billion

Makhtar Diop's picture
© Daniel Silva Yoshisato
© Daniel Silva Yoshisato

An estimated one billion people around the world – half of which are in Africa – lack official identification to prove who they are. And many millions more have forms of identification that cannot be reliably verified or authenticated. More than 450 million of these are children who have not had their birth registered. Women and the poor in low-income countries are less likely to have official identification.

Without a trusted and secure way to prove their identity, the poorest and most vulnerable face challenges in accessing healthcare, education, and financial services, as well as opportunities that can improve their economic and social mobility.

Breaking down the barriers to mobilizing sustainable investment

Ceyla Pazarbasioglu's picture
Also available in: Español
Closing Plenary of the Investor Forum. © World Bank

“Private capital is often an important source of sustainable finance. Public finance alone may not be sufficient to meet the demands for sustainable finance as the global economy continues to grow and poses increasing burdens on our resources and ecosystems. Mobilizing private investment in areas such as sustainable infrastructure, sustainable technologies and business model innovations, among others, can deliver substantive environmental, social, and economic benefits.”

This summary from the G20’s Sustainable Finance Synthesis Report was at the heart of the discussion at the Investor Forum, which was held on the sidelines of the G20 Summit in Buenos Aires in November. The event – hosted by the World Bank and the Government of Argentina – brought together investors holding over $20 trillion of assets as well as stakeholders and representatives from G20 governments. The goal was to identify steps for boosting long-term, sustainable, private-sector investments that tackle development challenges and promote economic growth in parts of the world that need it most.

Think behaviorally to boost impact

Carolina Sánchez-Páramo's picture
In Guatemala, Program Leader Marco Hernandez and his team tested behaviorally informed messages in letters to non-compliant taxpayers. © World Bank
In Guatemala, Program Leader Marco Hernandez and his team tested behaviorally informed messages in letters to non-compliant taxpayers. © World Bank
Behavioral science can provide creative solutions to difficult challenges, often at low cost. Behaviorally informed policy emphasizes the importance of context for decision making and behavior, paying attention to the social, psychological, and economic factors that affect what people think and do.

Since the 2015 World Development Report on Mind, Society, and Behavior, behavioral science approaches have been spreading across the World Bank Group’s work. Several staffers recently gave “lightning talks” about how they’re applying behavioral science to seemingly intractable problems that matter to all of us. Here are a few takeaways from the speakers who offered important lessons on incorporating human behavior into program design:

The ongoing impact of ‘nudging’ people to pay their taxes

Oscar Calvo-González's picture
Also available in: Español
© Maria Fleischmann/World Bank
© Maria Fleischmann/World Bank

Sustainability is the holy grail of development. There are many interventions that yield positive results in the short term but somehow fail to be sustained over time. This is why the experience in Guatemala that we are about to describe is worth paying attention to. In short, it shows that behavioral insights can lead to lasting change.

It all began in 2012 in the United Kingdom, with simple changes in the reminder letters sent to taxpayers that were late in their income tax payment. The changes were very successful, inducing payments of 4.9 million pounds (around $6.5 million) in a sample of almost 120,000 delinquent taxpayers, which would not have been raised without the intervention. The then-nascent institution called the "Behavioral Insights Team" (BIT) became known around the world with this effective and very low-cost intervention that was based on modifying the messages of the letters sent to delinquent taxpayers. The message that was most effective said: "Nine out of ten people in the U.K. pay their taxes on time. You are currently in the very small minority of people who have not paid us yet." Behavioral science experts have been able to show that telling people what most people do, especially when it comes to positive behavior, is a good technique to change behavior.

Get creative: Join the World Bank Group and Financial Times’ blog writing competition for high school students

Arathi Sundaravadanan's picture
Also available in: Español | Français | العربية | 日本語
© World Bank
© World Bank

Do you often wonder what kind of job you will have when you grow up? Do you think your school is preparing you for the work you may do in the future? What will classrooms and teachers of the future be like? Do you think there are better ways to learn? Do you have inspired and imaginative ideas to re-invent education? Are you between the ages of 16 and 19 and currently enrolled in high school or a secondary education institution?

If this sounds like you, then enter our blog writing contest! The World Bank Group and the Financial Times are hosting a competition for our future leaders. We want young people with brilliant ideas and solutions, who will be most affected by the changing nature of jobs and skills to share their perspective on what could help better prepare them for the future.

Why are we running this competition? Technology is rapidly changing the world we live in and bringing us many opportunities, but we also need to adapt to these changes. The jobs of the future will be different from the ones today and we will need to learn new things and develop new skills to excel at them. This builds on the recently launched Human Capital Project as well as the World Bank’s World Development Reports on The Changing Nature of Work and LEARNING to Realize Education’s Promise.

Green Bonds: From evolution to revolution

Heike Reichelt's picture
Also available in: Français | 日本語 | العربية | Español
© ThickStock.com/Getty Images
© ThickStock.com/Getty Images

The first green bond issued by the World Bank 10 years ago created the blueprint for today’s US$500+ billion labeled bond market. This blog post looks at how green bonds changed investor and issuer behavior and how the same model can be applied to help achieve the Sustainable Development Goals.


The capital markets have evolved over the last 10 years from a market where investors knew - and cared - little about what their investments were supporting, to one where purpose matters more than ever. There’s a revolution in the bond markets that was sparked by green bonds.

The green bond market has grown from a market dominated by issuers like the World Bank, an international organization owned by 189 countries with the sole purpose of eradicating extreme poverty and boosting shared prosperity, to one that includes a broad range of issuers - from private companies and banks, to utilities and governments. The simple concept behind green bonds has expanded to other labeled bonds, including social bonds and blue bonds. 

A Caribbean crystal ball: What can experience from Caribbean islands tell us about investing in climate resilience?

Kristalina Georgieva's picture
Also available in: Español | العربية | Français
A man walks amid destruction on a street in Roseau on the Caribbean island of Dominica following passage of Hurricane Maria. © CEDRICK ISHAM CALVADOS/AFP/Getty Images
A man walks amid destruction on a street in Roseau on the Caribbean island of Dominica following passage of Hurricane Maria. © CEDRICK ISHAM CALVADOS/AFP/Getty Images

In the Caribbean, people are already living in the future. It is world where climate change can seriously affect economic growth, government decisions and people’s jobs and lives. 
 
The recent report of the Intergovernmental Panel on Climate Change (IPCC) gave a stark warning of what happens if the world goes beyond the target of a 1.5 degree increase in temperature. At 2.0 degrees, we will see far worse droughts, floods, extreme heat and poverty for hundreds of millions of people. 

Today, climate change is intensifying pressure on communities and ecosystems all over the world, but the Caribbean countries are facing quite unique challenges. 
 

400 youth from 117 countries to present innovative ideas on how to invest in people

Alejandra de Lecea's picture
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Workshop participants discuss their innovative ideas at the 2017 World Bank Group Youth Summit. © World Bank
Workshop participants discuss their innovative ideas at the 2017 World Bank Group Youth Summit. © World Bank

Without investing in their people, countries cannot sustain economic growth, they will not have a skilled workforce ready for the jobs of tomorrow and they will not be able to participate effectively in the global economy.

That is why the World Bank Group is joining forces to increase investments in human capital - in the knowledge, skills and health that people accumulate throughout their lives.

Youth from all corners of the world will congregate in Washington DC for next week’s 2018 World Bank Group Youth Summit. This year’s Summit is designed to inspire fresh thinking on how to close the human capital gap.

During the two-day event, 400 students and young professionals from 117 countries will present innovative ideas to contribute to shrinking the human capital gap and foster the skills and well-being of individuals and will participate in sessions and workshops with experts from the World Bank Group, IBM, Intel, the United Nations and Stanford, among many others.

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