Author : Shoba Suri

Expert Speak Health Express
Published on Apr 05, 2021
From Labor to Leadership: Investing in Children

Human capital is defined as the “stock of competencies, knowledge, social, and personality attributes, including creativity, and cognitive abilities, embodied in the ability to perform labor so as to produce economic value.” The role of human capital in economic development is so vital that the modern growth theory considers it an important growth factor. Economic growth can bring about prosperity and opportunity, and it is therefore crucial to increase investment in human capital. Healthy women and children are the pillars of a flourishing society. Thus, investing in their well-being is crucial to achieving the new Sustainable Development Goals (SDGs) agenda.

Education plays a pivotal role in creating valuable human capital and improving productivity. The 1,000-day period between conception and two years of age—called the “window of opportunity”—is critical for improving birth and nutrition outcomes, as children learn faster during this age. Thus, investing in early childhood yields the highest economic returns.

The Government of India has launched a wide array of interventions that address the most essential needs of children during this window of opportunity—these schemes focus on aspects such as nutrition, food items and supplements, feeding practices, and antenatal and postnatal caregiving. Good nutrition, stimulation, safe environment and care also need to be ensured for optimum physical, mental, social, and cognitive development and to prevent adverse impacts on shortterm survival as well as long-term health and development.

Human capital development strategies that improve social mobility must be made an integral part of growth efforts by the government. Factors such as poverty, nutritional deficiencies and poor health hinder social and economic progress. Child labour remains a challenge, despite the UNESCO’s “Education for All” campaign, and is rampant around the world, especially in developing countries.

India has a wealth of human capital and must make cost-effective investments to improve child health, nutrition and education, to develop and sustain a healthy, highly skilled workforce. Education plays an important role in overcoming the various challenges that affect the performance of human capital in the world. Education with requisite skill can create competencies, improve the national gross product, allow the integration of technology in labour, and increase efficiency and effectiveness in the sphere of decision-making and socioeconomic governance. Moreover, such education inculcates confidence in job seekers. Investment in health facilities contributes to building a physically and mentally strong human capital pool and is essential for improving productivity, economic growth and security.

Nobel Prize-winning economist James Heckman has long argued that governments must “invest in early childhood education now or pay later.” Evidence suggests that an additional dollar invested in quality early-childhood programmes yields a return of between US$6 and US$17. Early stimulation interventions for infants and toddlers increase their future earnings by 25 percent. Gender inequality must also be addressed in early childhood, and the father’s role has proven significant in creating long-term positive effects. Empowering women in achieving gender equality also helps in sustainable development.

Early childhood practices affect the brain’s development and subsequent learning behaviours. Millions of young children fail to realise their full potential due to poverty, nutritional deficiencies, lack of early stimulation and limited learning opportunities. According to the World Bank, countries can use the Human Capital Index to assess how much income they are foregoing because of human capital gaps, and how these losses can be turned into gains.

Child-focused corporate social responsibility for the welfare of children can go a long way towards sustainable development. Investing in children is fundamental to protecting their human rights and leads to better social outcomes, including reduced poverty, inequality and improved efficiency.

A life cycle approach to investing in human capital can improve expected return. Investing in human capital will thus build a solid foundation for a more sustainable and equitable development in the future.

This essay originally appeared in Raisina Dialogue Conference Report 2019
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Shoba Suri

Shoba Suri

Dr. Shoba Suri is a Senior Fellow with ORFs Health Initiative. Shoba is a nutritionist with experience in community and clinical research. She has worked on nutrition, ...

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