The World Bank has warned that deteriorating health, education, and training in many developing countries is sharply reducing the future earning potential of children born today. A new report urges policymakers to focus on improving conditions in homes, neighbourhoods, and workplaces, arguing that such investments are essential for long-term economic prosperity.
The report, titled Building Human Capital Where it Matters, finds that in 86 of 129 low- and middle-income countries, indicators for health, education, or workplace learning declined between 2010 and 2025. It estimates that children born today in these countries could earn 51% more over their lifetime if their nation's human capital matched the performance of the best countries at similar income levels.
Evidence of the decline includes stunting in several sub-Saharan African countries, where the average adult is shorter today than 25 years ago, reflecting worse underlying health. Learning outcomes have also fallen across low- and middle-income countries, with the steepest drop in sub-Saharan Africa. The report highlights that children across these regions are achieving lower educational results than 15 years ago.
The analysis examines how factors at home, in neighbourhoods, and at work affect human capital. It cites research on left-behind children in China, who are cared for by relatives while parents migrate for work, noting that while household income is higher, these children perform worse in maths and language tests and report higher levels of depression. In San Salvador, people in gang-controlled neighbourhoods have fewer assets, lower incomes, and less education than those living just 50 metres away.
In the workplace, 40% of women in low- and middle-income countries are not employed at all. Among those who do work, up to 70% are in small-scale agriculture, low-quality self-employment, or microfirms, which generally offer limited training and few learning opportunities. The World Bank recommends a range of policies, including parenting support, clean water provision, and incentives for apprenticeships.
The report points to Jamaica, Kenya, Kyrgyzstan, and Vietnam as success stories, showing that countries at similar income levels can achieve vastly different human capital outcomes. With the US administration sceptical of international aid, World Bank President Ajay Banga has reframed the institution's role to focus on jobs and economic growth.
