The Human Capital Report 2015: Asia findings

The Human Capital Report 2015 (recently published by the World Economic Forum in collaboration with Mercer) showed Asia-Pacific, the world’s most populous region, scoring towards the middle of the range of the Human Capital Index results, with an overall average score of 67.83. The gap between the best and worst performers in region is the second largest of any region, reflecting in part the different stages of development of the 22 countries from the region covered in the Index, but also the varying degrees of human capital outcomes even between countries with similar income levels.

Scores for the region’s Under 15 Age Group pillar are much higher relative to other pillars, reflecting the region’s remarkable progress between generations. The best performing countries in the region are Japan (5), New Zealand (9), and Australia (13), while Nepal (106), Myanmar (112), and Pakistan (113) rank the lowest. China (64) and Indonesia (69) score in the middle range of the Index while India (100) falls into the lower half of the region.

Over half of the countries in the region have achieved near-universal primary school enrollment rates yet, on average, over 20% of the region’s under 15 age group is not enrolled in secondary education.

Among its 25–54 age group core working population, the average labour force participation rate is 81%. Lao PDR (105) has the highest rate, at 94%, while the Islamic Republic of Iran (80) has the lowest rate, at 56%. Singapore (24) has the highest proportion of high-skilled employment, at 54% of its workforce (2nd overall), with a regional average of 19%.

The region includes five countries that are ranked in the top 10 for the highest healthy life expectancy at birth. Despite this, labour force participation drops by more than 20 percentage points, on average, in transitioning from the 25–54 to the 55–64 Age Group pillar.

Japan (5), the best performer in the region, is part of the Human Capital Index’s top 10. It has achieved near-universal basic education and has a tertiary education attainment rate of over 50% for its working age population, ranking it first in the world. Japan also performs strongly in the 55–64 and 65 and Over Age Group pillars, boosted by the longevity (the world’s highest aged-dependency ratio and second highest healthy life expectancy) and education of its older population, but held back by relatively low labour force participation in the prime working age group, in particular due to the gender gap. There is greater potential to be tapped by closing the gender gap and tapping into the skills of the older workforce, particularly as labour force participation falls from 84% in the 25–54 Age Group to 69% for the 55–64 Age Group.

New Zealand (9) is the second best performer in the region and equally part of the Index overall top 10. It ranks first on the 55–64 Age Group pillar due to its high educational attainment and the age group’s active participation in the labour force. Australia (13) follows, with a strong performance on the 15–24 Age Group pillar due to high tertiary and vocational education enrolment rates. More than 90% of its employment share is in medium- and high-skilled occupations and less than 5% of youth are not in employment, education or training (5th overall).

The region’s top five is completed by Singapore (24) and the Republic of Korea (30), which ranks first in the world for its tertiary enrolment rate. Unlike for the other top performers in the region, however, business perceptions of the quality of its education system are comparatively low (63rd) and the country also ranks low in the ease of finding skilled employees and its labour force participation.

The Philippines (46), Mongolia (51), Malaysia (52), Thailand (57), Vietnam (59) and Sri Lanka (60) are next. China (64) ranks in the mid-range of the overall Index scores. Its younger population fares better than its 55–64 and 65 and over age groups as a result of increasing educational attainment in the population. Indonesia (69) trails China and follows a similar human capital profile across its age group pillars. Next are Iran (80), Bhutan (87), Cambodia (97) and Bangladesh (99), followed by India (100). Although the latter’s educational attainment has improved markedly over the different age groups, its youth literacy rate is still only 90% (98th), well behind the rates of other emerging markets. India also ranks poorly on the labour force participation rate due to its large informal sector. Lao PDR (105) and Nepal (106) are next. Both countries’ scores in the younger population are worse than for their elder generations due to low secondary school enrolment rates. Nepal, moreover, has the highest incidence of child labour in the region (107th overall), with one in three children affected. Myanmar (112) and Pakistan (113) rank at the bottom of the region as a result of their poor performance on educational outcomes throughout all the Age Group pillars.

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