Opinion – Pablo Acosta: How much talent is wasted in Brazil?

It can’t be little. After all, according to the World Bank, at least half of Brazilian children aged 10 years will not be able to read and understand this paragraph – the one you will soon finish. In addition, around four out of ten ninth graders do not acquire basic math skills such as fractions and divisions. Without the basics, it’s critical that we know how much talent we’re really wasting.

The World Bank’s Brazilian Human Capital Report launches into this debate and highlights the importance of investing in people. What would it be like if all children had the opportunity to enjoy quality education and health care? How much human capital does a Brazilian child fail to obtain throughout his life? A new old debate that ebbs and flows as the breeze changes direction.

The Human Capital Report proposes an alternative. Imagine a child with proper nutrition, low risk of systematically becoming ill or dying in the first few years of life, receiving a complete, high-quality education through adolescence and growing into a healthy adult. It would not be an exaggeration to argue that this child will develop more skills than one in the opposite situation.

Human Capital is that: the set of skills developed and accumulated throughout life. The ICH (Human Capital Index) seeks to materialize this idea. The ICH compresses child nutrition, mortality risk, education and health into a single number that measures future productivity. future? Yup. Unlike other indicators, its interpretation is prospective: if a Brazilian child born in 2019 enjoys, throughout his life, the same health and education conditions he had at birth, his potential productivity will be 60% at 18 years of age. Today’s human capital index is a snapshot of tomorrow’s productivity.

But Brazil is a continent of inequalities. What is 40% of wasted talent on average reaches 50%, or even 60%, among children in the North and Northeast regions of Brazil. Afro-descendants and indigenous people reach, respectively, only 56% and 52% of their total human capital, compared to 63% among white children. It is an inequality within the other. However, perhaps the clearest result of the Report concerns the waste of female talent.

If, on the one hand, women accumulate more human capital than men at 18 years of age, on the other hand, this advantage evaporates when we consider its use in the labor market. While men reach 56% and use 40% of their human capital, women develop 60% of their potential but use only 32% in the labor market. Above all, women of African descent are penalized twice, once for race and once for gender, and end up using only 29% of their potential productivity.

The Human Capital Report asks “why do we see such differences between men and women, white and non-white, across regions all the time?” Well, if education is the pillar that sustains two-thirds of regional inequalities, the labor market is the lever that widens differences by gender and race. Between whites and non-whites, for example, the difference in performance in mathematics and Portuguese is one of the main factors. By gender, boys have higher dropout and school failure rates and also a lower probability of surviving to age 60.

As already said, discussed and refuted, the pandemic was, or is being, harmful to the accumulation of skills. Even with greater growth here, an expansion of inequalities there, the Human Capital Index had been growing in Brazil until 2019. Now, however, the pandemic has pulled the reins of this narrative. All formation stages are being affected.

A typical Brazilian born in 2021 tends to reach 54% of their productive potential in adulthood – an ICH equivalent to 2009 (that is, a lost decade of human capital accumulation), or 6 percentage points less than 2019. Education responds for half of this reduction, mainly in expected years of schooling; another 30% is, of course, due to the drop in adult survival rates (directly or indirectly) by the pandemic.

The study makes several recommendations for Brazil to accelerate the recovery of human capital. As the impacts of Covid-19 have largely materialized in education, recovery and accelerating learning should be priorities for years to come.

First, all students have to go back to school. Brazil can use its wealth of administrative data to:

(1) monitor students who dropped out of studies during the pandemic;

(2) offer scholarships to attract students back to school; and

(3) expand active search programs to bring students back to school.

But other current human capital policies can be revisited, adapted and strengthened.

The Unified Health System, for example, can do more to protect children and adolescents from the health and socio-emotional consequences of the pandemic. As pre-existing inequalities tend to worsen, the Brazilian conditional cash transfer program can be further strengthened to support groups of people most affected by the Covid-19 pandemic. Successful policies are a lever.

Brazil needs, above all, to learn from itself. The fact that there are “many Brazils” can be seen as an opportunity, as municipalities have the autonomy to seek their own solutions.

Understanding why some municipalities are consistently improving human capital and trying to replicate their success will be vital in the years to come. The state of Ceará and its municipality of Sobral are two known examples in elementary education. Pernambuco and Cocal dos Alves (PI) are two other policy models aimed at secondary education.

The report identified five common good practices at the local level. First, all these municipalities made use of collaborative planning, with working groups or thematic councils coming together to solve specific problems. Second, there were public consultations to monitor and follow up on planned activities over several years. Third, officials responsible for entering and monitoring data were hired. Fourth, governments set clear goals on health and education, and all were widely disseminated to society. Fifth, there was a deep implementation of federal programs that contributed to monitoring the delivery of services.

But first of all, the Human Capital Report is an invitation to debate. A portrait of the Brazil of the future, while strategies focused on people are postponed. According to the Report, if we grow as in the pre-pandemic period, it will take Brazil around 60 years to equal human capital levels to those of developed countries today. Only in 2035 will we find the levels of 2019 again. There are no shortcuts. The success of a country lies in the opportunities enjoyed by people to flourish, be and exercise their abilities. The Report estimates that Brazil’s GDP could be up to 2.5 times larger when little or no talent is wasted. Tomorrow starts today.

This column was written in collaboration with my World Bank colleagues Ildo Lautharte, Global Practice Economist in Education, and Giovanna Quintão, Junior Professional Associate.