Expected human capital is a measure that combines education levels, functional health, and learning to assess a population's economic productivity. It is defined as the attributes of a population that contribute to economic growth through technology development and adoption. Expected human capital is calculated for each country by applying age-specific rates of education, health, and learning to demographic data. Higher expected human capital is correlated with higher GDP. Since 1990, many countries have improved their expected human capital through gains in education and health, leading to faster economic growth. Finland currently has the highest expected human capital while Niger, South Sudan and Chad have the lowest.

1. Expected Human Capital
Key themes and talking points
September 2018

2. What is human capital?
• Human capital can be thought of as the educational
attainment, learning, and functional health status of the
workforce, which contributes to economic productivity.
• Human capital is often thought of alongside other types of
economic capital, including manufactured capital, financial
capital, and natural resources.
• It is a concept that recognizes that not all labor is equal, and
the quality of workers can be improved by investing in them.
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3. How is expected human capital defined?
• In the new study, “Measuring human capital: a systematic
analysis of 195 countries and territories, 1990–2016,”
published in the international science journal The Lancet,
IHME researchers defined “expected human capital” as:
The attributes of a population that, along with physical capital such
as buildings, equipment, and other tangible assets, contribute to
economic productivity. These attributes include aggregate levels of
education, training, skills, and health in a population that affect the
rate at which technologies can be developed, adopted, and
employed to increase productivity.
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4. How is expected human capital computed?
• Expected human capital is computed similar to life expectancy
– by applying current age- and sex-specific rates of four
components to the population born in each country each year.
o Its calculation combines:
─ Expected years lived between the ages of 20 and 64, which are then
adjusted for the next component: functional health status. Functional
health status – scaled from 0 to 100 – is based on seven conditions
known to impact learning and productivity.
With
─ Years of completed education (from 0 to 18), which are then adjusted
by the next component: learning. Learning – scaled from 0 to 100 – is
based on average student scores on internationally comparable tests.
• The highest possible score is 45 and the lowest is 0.
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5. Why does it matter?
• Higher expected human capital is correlated with higher
national gross domestic product (GDP).
• Countries whose expected human capital has increased the
most since 1990 have also tended to experience faster growth
in their GDP per person.
o Countries in the top 25% of human capital improvement between
1990 and 2016 had a 1.1% higher annual GDP growth rate than
those in the bottom 25% of human capital improvement.
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6. What is the current picture?
Map of expected human capital by country in 2016
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7. What trends have emerged over time?
• Among the 20 largest countries based on 2016 population, Japan had the highest expected human
capital, at 24 years. Ethiopia was the lowest among large countries, at 5 years.
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Expected human capital in 1990 and 2016
for the 20 largest countries in the world,
by 2016 total population
The effect of progressively combining the four
components of human capital – expected years
lived from 20-64 years of age, mean years of
education, learning and functional health status
– in the 20 largest countries in the world (by
2016 population) differs by country and year.

8. What trends have emerged over time?, cont.
• Turkey showed the most dramatic increase – from 8 years in 1990 to
20 years in 2016.
• Asian countries with notable improvement included China, Thailand,
Singapore, and Vietnam.
• Within Latin America, Brazil stood out for more rapid improvement.
• The greatest increase among sub-Saharan African countries was in
Equatorial Guinea.
• Some of the world’s most rapid improvements were in the Middle
East, including Saudi Arabia and Kuwait.
• Some countries stagnated. The US was ranked sixth in human
capital in 1990 but dropped to 27th in 2016 due in part to a lack of
improvement in years of education attained.
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9. What are some other key findings?
• Finland led the 195 countries studied, at 28 years of expected
human capital, followed by Iceland, Denmark, the Netherlands
(each with 27 years), and Taiwan (26 years).
• Niger, South Sudan, and Chad all ranked lowest in 2016 at 2
years, followed by Burkina Faso and Mali (each with 3 years).
• In 2016, 44 countries surpassed 20 years of expected human
capital, while 68 countries had fewer than 10 years.
• Rankings for the 10 most populous countries in 2016 were
China (44th), India (158th), United States (27th), Indonesia
(131st), Brazil (71st), Pakistan (164th), Nigeria (171st),
Bangladesh (161st), Russia (49th), and Mexico (104th).
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10. Questions?
Media contacts
• Kelly Bienhoff
+1-206-897-2884 (office)
+1-913-302-3817 (mobile)
kbien@uw.edu
• Dean Owen
+1-206-897-2858 (office)
+1-206-434-5630 (mobile)
dean1227@uw.edu
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