Human capital for all: are we there yet? 5 things to know about gender equality and human capital

The Human Capital Index (HCI) launched by the World Bank Group in October 2018 is a simple but powerful metric that measures the future productivity of children born today, compared to what it could be if they had benefited from ‘complete education and full health’. The index is made up of important components of human capital: education, health, and survival. The sex-disaggregated HCI emphasizes the World Bank Group’s priority on gender, and specifically in ensuring equal investment in human capital of boys and girls.

On this International Literacy Day, drawing on data from the World Bank Gender Data Portal, we present five facts on gender and human capital.

1. At a regional level, much progress has been made in closing gender gaps in human capital among boys and girls.

In 126 countries where we have sex-disaggregated HCI data, girls are on average slightly better off in all regions and all country income groups in the dimensions the HCI measures, like stunting rates. In fact, the distance between a country’s human capital and the frontier (1 in the figure above) is far larger than any gender gaps.

Breaking this down by the components of the HCI, there is a similar pattern in stunting, child and adult survival rates. However, the picture that emerges in education is more complicated.

2. For many at a regional level however, gender gaps to the detriment of girls remain in education, while gender gaps to the detriment of boys have emerged in other regions.

Despite amazing global achievement in bringing girls to school, the HCI education component shows that boys have higher expected years of school than girls in low-income countries (LICs), and in the regions of Sub-Saharan Africa and South Asia. In 10 of 24 LICs, boys’ expected years of school is at least 1 standard deviation higher than that of girls. Harmonized test scores show that girls also have slightly poorer learning outcomes on average than boys in LICs. This is in contrast to middle- and high-income countries where there is no clear gender gap pattern, at least in math scores (see this blog).

However, in a pattern increasingly noted and discussed (see this UNESCO report), gender gaps where outcomes for boys are worse than for girls emerge in some regions, most notably in Latin America & Caribbean. The trend suggests this is on the horizon for East Asia and South Asia.

3. There is still a large gap in literacy between adult men and women in many regions.

Given the large investments in education opportunities in recent years, literacy gaps in the population of adults look quite different than among youth. Since 1985, the gap in literacy rates between young men and women shrunk everywhere. Some gaps remain among current youth in Middle East & North Africa, South Asia, and Sub-Saharan Africa. However, the gender gap is considerably smaller compared to the gap to the frontier of universal literacy.

Nonetheless, the now-adult women are still disadvantaged compared to men, and these gaps are large. Comprehensive adult literacy campaigns would be needed to close literacy gaps among current adult populations.

4. We can only observe gaps that we can measure.

These observations come with a large caveat. In most regions, the state of gender disparity in human capital is not fully clear, due to poor data availability. As many as 20 percent of countries included in the 2018 HCI ranking are missing sex-disaggregated HCI data, most notably in Sub-Saharan Africa, South Asia, and East Asia & Pacific.

The gaps in sex-disaggregated HCI data are mainly driven by the lack of sex-disaggregated expected years of school and test scores data. While sex-disaggregated stunting rates are missing for even more countries, these do not create a gap in the sex-disaggregated HCI data, because the Index can be constructed with adult survival only, in the absence of stunting rates. Increasing the availability of sex-disaggregated data will enable more countries to evaluate the extent of gender disparities, put the right policies in place, and ensure that no one is left behind.

5. Human capital potential needs to be utilized to translate to productivity gains and shared growth.

Despite girls’ improved human capital, their potential to convert this into economic opportunities may remain underutilized. Adult female labor force participation worldwide is 27 percentage points lower than men. Gender wage gaps persist at around 20% and much of this pay gap “remains unexplained by differences in education” (see this ILO report). Many factors explain this, including occupational sex-segregation, disadvantageous social norms on household and market roles, lack of childcare and adequate leave policies (for both fathers and mothers), sexual harassment and unsafe transportation, differential constraints in access to finance and markets, and legal/regulatory barriers to start and grow firms. For instance, this blog shows that there are still barriers hindering women from acquiring relevant training and accessing higher-productivity jobs.

Unless these issues are solved and women are given the same opportunities as men in the labor market, progress will be limited in contributing to economic growth and well-being improvements. A low perceived labor market return on schooling could also discourage households from sending girls to school and stifle future progress in bringing more girls to school. This presents an opportunity for policymakers and the development community to galvanize and remove remaining barriers for gender equality.