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The Contribution of Human Capital to Current and Future Growth: An Extension of the World Bank's Long-Term Growth Model (LTGM-HC). Policy Research Working Paper 11276

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Title: The Contribution of Human Capital to Current and Future Growth: An Extension of the World Bank's Long-Term Growth Model (LTGM-HC). Policy Research Working Paper 11276
Language: English
Authors: Arthur Mendes, Steven Pennings, World Bank
Source: World Bank. 2025.
Availability: World Bank Publications. 1818 H Street NW, Washington, DC 20433. Tel: 202-458-4500; Fax: 202-552-1500; Web site: http://www.worldbank.org/
Peer Reviewed: N
Page Count: 71
Publication Date: 2025
Sponsoring Agency: Swedish International Development Cooperation Agency (Sida)
Agence Française de Développement (AFD) (France)
European Union (EU) (Belgium)
Government of Japan
Document Type: Reports - Research
Descriptors: Foreign Countries, Human Capital, Prediction, Models, Population Growth, Economics, Educational Background, Health, Mortality Rate, Labor Force, Productivity, Educational Indicators
Abstract: This paper presents the Long-Term Growth Model--Human Capital Extension (LTGM-HC), a spreadsheet-based toolkit that projects the human capital of the workforce from 2025 to 2100 for 153 countries. The LTGM-HC simulates pre-tertiary years of schooling, education quality, and health across age cohorts and how they affect current and future workforce productivity. The paper also produces three sets of general results. First, it provides new estimates of the current rate of human capital growth, which differ substantially from those in the Penn World Tables. Global average human capital growth is almost 1 percent and is surprisingly similar across income groups, as greater historical gains in years of schooling in poorer countries are offset by lower initial school quality. Second, it provides new estimates of the pace of future human capital growth. Without future reforms, average human capital growth will slow by around 0.15-0.2 percentage points per decade, hitting zero by 2080 when today's children begin to retire. In contrast, a scenario with a typical pace of reform almost halves the rate of decline. Finally, it provides new estimates of the contribution of human capital to current and future economic growth. In a typical reform scenario, human capital growth is projected to raise annual GDP per capita growth by around half a percentage point over the next 75 years, leaving GDP per capita 45 percent higher by 2100. However, about two-thirds of these gains reflect reforms that have already been enacted. An extension to include tertiary education raises human capital growth, and its contribution to GDP growth, by around 0.1-0.2 percentage points.
Abstractor: As Provided
Entry Date: 2026
Accession Number: ED679769
Database: ERIC
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  Availability: 0
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  Data: The Contribution of Human Capital to Current and Future Growth: An Extension of the World Bank's Long-Term Growth Model (LTGM-HC). Policy Research Working Paper 11276
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  Data: <searchLink fieldCode="AR" term="%22Arthur+Mendes%22">Arthur Mendes</searchLink><br /><searchLink fieldCode="AR" term="%22Steven+Pennings%22">Steven Pennings</searchLink><br /><searchLink fieldCode="AR" term="%22World+Bank%22">World Bank</searchLink>
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  Data: World Bank Publications. 1818 H Street NW, Washington, DC 20433. Tel: 202-458-4500; Fax: 202-552-1500; Web site: http://www.worldbank.org/
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  Data: Swedish International Development Cooperation Agency (Sida)<br />Agence Française de Développement (AFD) (France)<br />European Union (EU) (Belgium)<br />Government of Japan
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  Data: <searchLink fieldCode="DE" term="%22Foreign+Countries%22">Foreign Countries</searchLink><br /><searchLink fieldCode="DE" term="%22Human+Capital%22">Human Capital</searchLink><br /><searchLink fieldCode="DE" term="%22Prediction%22">Prediction</searchLink><br /><searchLink fieldCode="DE" term="%22Models%22">Models</searchLink><br /><searchLink fieldCode="DE" term="%22Population+Growth%22">Population Growth</searchLink><br /><searchLink fieldCode="DE" term="%22Economics%22">Economics</searchLink><br /><searchLink fieldCode="DE" term="%22Educational+Background%22">Educational Background</searchLink><br /><searchLink fieldCode="DE" term="%22Health%22">Health</searchLink><br /><searchLink fieldCode="DE" term="%22Mortality+Rate%22">Mortality Rate</searchLink><br /><searchLink fieldCode="DE" term="%22Labor+Force%22">Labor Force</searchLink><br /><searchLink fieldCode="DE" term="%22Productivity%22">Productivity</searchLink><br /><searchLink fieldCode="DE" term="%22Educational+Indicators%22">Educational Indicators</searchLink>
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  Data: This paper presents the Long-Term Growth Model--Human Capital Extension (LTGM-HC), a spreadsheet-based toolkit that projects the human capital of the workforce from 2025 to 2100 for 153 countries. The LTGM-HC simulates pre-tertiary years of schooling, education quality, and health across age cohorts and how they affect current and future workforce productivity. The paper also produces three sets of general results. First, it provides new estimates of the current rate of human capital growth, which differ substantially from those in the Penn World Tables. Global average human capital growth is almost 1 percent and is surprisingly similar across income groups, as greater historical gains in years of schooling in poorer countries are offset by lower initial school quality. Second, it provides new estimates of the pace of future human capital growth. Without future reforms, average human capital growth will slow by around 0.15-0.2 percentage points per decade, hitting zero by 2080 when today's children begin to retire. In contrast, a scenario with a typical pace of reform almost halves the rate of decline. Finally, it provides new estimates of the contribution of human capital to current and future economic growth. In a typical reform scenario, human capital growth is projected to raise annual GDP per capita growth by around half a percentage point over the next 75 years, leaving GDP per capita 45 percent higher by 2100. However, about two-thirds of these gains reflect reforms that have already been enacted. An extension to include tertiary education raises human capital growth, and its contribution to GDP growth, by around 0.1-0.2 percentage points.
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      – Text: English
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      Pagination:
        PageCount: 71
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      – SubjectFull: Foreign Countries
        Type: general
      – SubjectFull: Human Capital
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      – SubjectFull: Prediction
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      – SubjectFull: Models
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      – SubjectFull: Population Growth
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      – SubjectFull: Educational Background
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      – SubjectFull: Health
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      – SubjectFull: Mortality Rate
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      – SubjectFull: Labor Force
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      – SubjectFull: Productivity
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      – SubjectFull: Educational Indicators
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      – TitleFull: The Contribution of Human Capital to Current and Future Growth: An Extension of the World Bank's Long-Term Growth Model (LTGM-HC). Policy Research Working Paper 11276
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