MPSC 2021 Prelims Paper-I · Question 39 of 100

Correct — option (4), both statements are correct. The World Development Report is the World Bank's annual flagship publication, running since 1978, and the 2019 edition, titled The Changing Nature of Work, is where the Human Capital Index was first presented in a World Development Report. Statement (a) reproduces the World Bank's own description of what the index measures: it quantifies the contribution of health and education to the productivity of the next generation of workers. The index is built by asking what a child born today can expect to attain by the age of eighteen given the risks of poor health and poor schooling that prevail where she lives, and it combines three components — survival, measured by the probability of surviving to age five; schooling, measured by the expected years of school adjusted for what children actually learn; and health, measured by the adult survival rate and the rate of stunting among children under five. Statement (b) is correct as well. The index is expressed on a scale from zero to one, where one represents the benchmark of complete education and full health, so a score of, say, 0.49 means that a child born in that country will be about forty-nine per cent as productive as she could have been under the benchmark. Expressing the index this way is deliberate: it converts a bundle of health and education indicators into a single number that can be read as a fraction of lost potential, and it makes the loss comparable across countries. With both statements standing, the row that accepts both is the answer, and that is option (4). The word 'correct' is printed in bold in the stem in both language blocks.

• (1)(a) only is correct — This row accepts the description of what the index measures but rejects its range, and the range is not in doubt. The Human Capital Index is reported on a scale from zero to one, one being the benchmark of complete education and full health, and every published country score lies between those limits — which is what makes a score readable as a fraction of the productivity a child could have achieved. A candidate lands here by treating the index as though it were an index number of the ordinary statistical kind, expressed against a base of 100, or by confusing it with the Human Development Index, which is also reported between zero and one but measures something different. Both statements in this question hold, so no row that rejects one of them can be right.
• (2)(b) only is correct — This row accepts the zero-to-one range but rejects the description of what the index measures, so it rejects the World Bank's own formulation. The Bank describes the Human Capital Index as quantifying the contribution of health and education to the productivity of the next generation of workers, and the phrase 'next generation' is exact rather than loose: the index is calculated for a child born today, projected to the age of eighteen, and it therefore measures the future workforce rather than the current one. The report in which it appeared, the World Development Report 2019 on the changing nature of work, was concerned precisely with what future workers would need. Rejecting statement (a) discards the definition the index is built on.
• (3)both (a) and (b) are incorrect — This row rejects both statements, and neither can be rejected. The description of the index as a measure of the productivity of the next generation of workers is the World Bank's own, and the zero-to-one scale is how every edition of the index reports its scores. A row of this kind is included in almost every two-statement question as a matter of form, and it is chosen most often by a candidate who has not met the topic at all and is guessing. It is worth noticing what the four rows in this question actually cover: one accepts each statement alone, one rejects both, and one accepts both, so the four rows exhaust the possibilities and there is no way to eliminate a row without forming a verdict on the statements themselves.

Human capital is the stock of health, knowledge and skills that people accumulate and that makes them productive. The World Bank's Human Capital Index turns that idea into a single measure of what a child born today can expect to attain by the age of eighteen, given the health and education conditions of the country in which she is born. It rests on three components: survival, the probability of reaching age five; schooling, the expected years of school adjusted for quality using harmonised test scores, so that a year of school in one country is not equated with a year in another; and health, captured by the adult survival rate and the prevalence of stunting among young children. The result is expressed between zero and one, where one is the benchmark of complete education and full health, so a score of 0.5 means a future worker half as productive as she could have been. The index was presented in the World Development Report 2019, The Changing Nature of Work, and has been updated since. India's score has been reported at 0.49, placing it 116th among the 173 economies covered in that update. The Human Capital Index should be kept distinct from the United Nations Development Programme's Human Development Index, which is also scored between zero and one but combines life expectancy, education and income to measure current development rather than the future productivity of a child born today.

International indices are a reliable source of questions in the MPSC economy and current affairs sections, and the Commission tests four things about each: who publishes it, what it measures, what its scale is, and where India stands. This question tests the first three, and it does so in the two-statement format, where the four rows exhaust every combination — accept the first, accept the second, reject both, accept both — so there is no shortcut and both statements must be judged. That is worth recognising as a structural feature, because it tells a candidate immediately that guessing by elimination will not work here. The other point to carry away is that a country's rank and score on any index change with each edition, while the publisher, the purpose and the scale do not. Examination questions are set far more often on the stable attributes than on the moving ones, so preparation should be weighted the same way: learn what each index measures and how it is scaled, and treat the current value as something to refresh shortly before the examination.

• The World Development Report is the World Bank's annual flagship publication, issued since 1978; the 2019 edition was titled The Changing Nature of Work, and the Human Capital Index was presented in it.
• The World Bank describes the Human Capital Index as quantifying the contribution of health and education to the productivity of the next generation of workers.
• The index is built on three components — survival to age five, expected years of school adjusted for learning quality, and health measured by adult survival and child stunting.
• Scores run from zero to one, where one is the benchmark of complete education and full health; a score of 0.49 means a child can expect to be about forty-nine per cent as productive as under that benchmark.
• India has been reported at 0.49 on the index, ranked 116th of the 173 economies listed in that update; values and ranks are revised at each edition, so the edition should always be quoted.

• Confusing the World Bank's Human Capital Index with the United Nations Development Programme's Human Development Index; both run from zero to one but measure different things and are published by different bodies
• Assuming an index expressed as a single number must be scaled to 100; the Human Capital Index is scaled from zero to one, with one representing complete education and full health
• Quoting a rank or score without its edition; every index revises its values, and a figure without a year is unusable in an answer
• Reading 'next generation of workers' as loose language; the index is calculated for a child born today and projected to age eighteen, so it deliberately measures the future workforce

International indices reach MPSC papers as statement clusters like this one, as matching questions pairing an index with the organisation that publishes it, and as single-line items asking what a named index measures or where India ranks on it. The Commission favours the publisher and the purpose over the current value, because those do not change between the setting of the paper and the day of the examination. Preparation is a single table of about twenty indices carrying the publishing body, what is measured, the scale, the number of countries covered and India's most recent position, refreshed once a year. Add the World Bank's own group structure and its flagship reports, since questions about the publisher are as common as questions about the index.

No directly related past PYQ was found.

• practice — not a real PYQ

  The Human Capital Index, presented in the World Development Report 2019, is published by which organisation and measured on what scale?

  • (a)the United Nations Development Programme, on a scale of zero to one
  • (b)the World Bank, on a scale of zero to one
  • (c)the International Monetary Fund, on a scale of zero to one hundred
  • (d)the World Economic Forum, on a scale of one to seven

  Answer(b) the World Bank, on a scale of zero to one — the index quantifies the contribution of health and education to the productivity of the next generation of workers, with one representing the benchmark of complete education and full health. The Human Development Index, also scored from zero to one, is the United Nations Development Programme's publication and measures current development through life expectancy, education and income rather than the future productivity of a child born today.

• practice — not a real PYQ

  Which of the following is NOT one of the three components of the World Bank's Human Capital Index?

  • (a)the probability of survival to age five
  • (b)expected years of school adjusted for learning quality
  • (c)adult survival rate and the stunting rate among children under five
  • (d)gross national income per capita at purchasing power parity

  Answer(d) gross national income per capita at purchasing power parity — that is a component of the United Nations Development Programme's Human Development Index, not of the Human Capital Index. The Human Capital Index is built from survival, schooling adjusted for what children actually learn, and health measured through adult survival and child stunting, and it deliberately excludes income, since it is measuring the potential productivity of a future worker rather than the present standard of living.