Which of the following statements are correct ?
(a) The Human Capital Index (HCI) suggested in World Development Report - 2019 is measured in terms of the productivity of the next generation of worker

Question

Which of the following statements are correct ?
(a) The Human Capital Index (HCI) suggested in World Development Report - 2019 is measured in terms of the productivity of the next generation of workers.
(b) HCI ranges between zero and one.

UnlockIAS · Accepted Answer

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.

Why the other options are wrong — (a) 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.  (b) 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.  (c) 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.

Concept: 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.

State PCS 2021 Q39 — Economy PYQ with Answer

State PCS 2021 Q39 — Economy PYQ with Answer