WASHINGTON, February 12, 2026 — A chilling trend is unfolding globally: children born today in many developing nations face significantly diminished lifetime earnings due to declining health, education, and skills development, according to a new report. The World Bank estimates these children could earn 51% more over their lifetimes if their countries invested in building human capital to match the levels of similarly prosperous nations.
Human Capital Crisis: A Looming Threat to Global Prosperity
Declining health, education, and workplace skills are jeopardizing the future economic potential of millions of children in low- and middle-income countries.
- In 86 of 129 low- and middle-income countries, health, education, or workplace learning has worsened between 2010 and 2025.
- Factors like childhood stunting, lack of access to quality education, and limited job training are key drivers of this decline.
- Countries like Jamaica, Kenya, Kyrgyzstan, and Vietnam demonstrate that improvements in human capital are achievable.
- Approximately 70% of workers in these nations are trapped in low-paying jobs with limited opportunities for advancement.
The report, titled “Building Human Capital Where it Matters,” urges policymakers to prioritize improvements in three crucial areas: homes, neighborhoods, and workplaces. Mamta Murthi, the World Bank’s vice-president for people, emphasized the stakes: “The prosperity of low- and middle-income countries depends on their ability to build and protect human capital. Right now, we see that many countries are struggling to improve nutrition, learning and skills of their current and future workforce, which raises concerns about labour productivity and the types of jobs their economies can sustain in the future.”
What factors are eroding human capital in developing nations? The 140-page analysis points to a complex web of challenges, ranging from malnutrition leading to stunted growth in childhood to the pervasive influence of criminal activity in local communities.
The impact is already visible. Disturbingly, in several sub-Saharan African countries, the average adult is now shorter than they were 25 years ago—a stark indicator of deteriorating health. Educational outcomes are also slipping, with children across low- and middle-income countries demonstrating lower learning levels than they did 15 years ago, and sub-Saharan Africa experiencing the most significant decline.
As many as 70% of workers in low- and middle-income countries are employed in small-scale agriculture, precarious self-employment, or microfirms, offering limited training and few opportunities for skill development.
The report highlights the critical role of the home environment, citing research showing that the quality of early childhood care has lasting effects. For example, millions of children in China are being raised by relatives while their parents migrate for work. Studies reveal that these “left-behind children,” despite living in households with higher incomes, perform worse on math and language tests and exhibit higher rates of depression.
Neighborhood safety also plays a significant role. Research from San Salvador demonstrates that individuals living in gang-controlled areas have fewer assets, lower incomes, and less education compared to those just 50 meters away.
Workplace opportunities are equally crucial. The report notes that 40% of women in low- and middle-income countries are not employed. And for those who are, the vast majority – around 70% – are stuck in “small-scale agriculture, low-quality self-employment, or microfirms,” where formal training and on-the-job learning are scarce.
The World Bank recommends a broad spectrum of policies to address these issues, including support for parents, access to clean water, and incentives for apprenticeships. The report also points to success stories, showcasing how countries like Jamaica, Kenya, Kyrgyzstan, and Vietnam have effectively built human capital despite facing similar challenges.
The call for action comes as the US administration expresses skepticism about international aid. Ajay Banga, the president of the World Bank, has responded by refocusing the institution’s mission on job creation and economic growth.
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