"Foundational literacy and numeracy investments yield higher social returns than spending on universities"

"percent for humanities to 126 percent for engineering and technology.25 Tertiary enrollment and expenditure also vary considerably by region (fi gure 4.5). The changing nature of work makes tertiary education more attractive in three ways. First, technology and integration have increased the demand for higher-order general cognitive skills—such as complex problem-solving, critical thinking, and advanced communication—that are transferable across jobs but cannot be acquired through schooling alone. The rising demand for these skills has enhanced the wage premiums of tertiary graduates, while reducing the demand for less educated workers. Second, tertiary education increases the demand for lifelong learning. Workers are expected to have multiple careers, not just multiple jobs over their lifetime. Tertiary educa- tion—with its wide array of course offerings and fl exible delivery models such as online learning and open universities—meets this growing demand. Third, tertiary education—especially universities—becomes more attractive in the changing world of work by serving as a platform for innovation. The relevance of tertiary education systems for the future of work depends on how well they deliver on these three fronts. Increasingly, skills acquisi- tion is a continuum, not a fi nite, unchangeable path. Flexibility is increased by ensuring that when students open the door to one pathway, the doors to other pathways do not close irrevocably. For example, when fi rst undertaking a tertiary education most students must choose between general education and vocational training. General education such as programs on engineering 78 | WORLD DEVELOPMENT REPORT 2019 or economics equip students with the transferable higher-order skills that determine their overall learning readiness or trainability. By contrast, voca- tional training, such as programs on nursing or airport operations, is directly related to specifi c occupations. Once this choice is made—especially if it is for vocational training—it is typically diffi cult and expensive to reverse. T he relative returns to general and vocational education are changing in unpredictable ways, and most economies continue to demand both. Tech- nological progress tends to lower the demand for certain occupation-specifi c skills, making certain vocational degrees obsolete. It also leads to a higher depreciation of narrow job-specifi c skills compared with general skills. Yet vocational training continues to be pursued by many students. In 2012 63 percent of Dutch higher education students were attending vocational training.26 This share was more than 50 percent in Malaysia and 31 percent FIGURE 4.5 The gross tertiary enrollment ratio and percentage expenditure on tertiary education varied by region in 2016 Sources: World Bank’s World Development Indicators database. Data on tertiary education expenditure for the Middle East and North Africa a re from World Bank (2018a). Note: “Gross tertiary enrollment ratio” is the ratio of total enrollment, regardless of age, to the population of the age group that offi cially corresponds to tertiary education. “Percentage expenditure on tertiary education” is the expenditure on tertiary education expressed as a percentage of the total general government expenditure on education. North America 27% Europe and Central Asia 23% World 22% South Asia 21% Latin America and the Caribbean 19% East Asia and Pacific 17% Sub-Saharan Africa 20% North America 84% Europe and Central Asia 67% Latin America and the Caribbean 48% Middle East and North Africa 41% East Asia and Pacific 44% World 37% South Asia 23% 9% Gross tertiary enrollment ratio Percentage expenditure on tertiary education Middle East and North Africa 24% Sub"

"reap higher economic returns from new technologies. By contrast, when technological disruptions are met with inadequate human capital, the existing social order may be undermined. Chapter 3 addresses the link between human capital accumulation and the future of work, look- ing more closely at why governments need to invest in human capital and why they often fail to do so. Chapter 3 also introduces the World Bank’s new human capital project. To ensure effective policy design and delivery, more information and better measurement of foundational human capital are needed, even when there is full willingness to invest in human capital. The project has three compo- nents: a global benchmark—the human capital index; a program of mea- surement and research to inform policy action; and a program of support for country strategies to accelerate investment in human capital. The index is measured in terms of the amount of human capital that a child born in 2018 can expect to attain by the end of secondary school, taking into account the risks of poor health and poor education that prevail in the country in which the child was born during that same year. In other words, it measures the productivity of the next generation of workers rel- ative to a benchmark of complete education and full health. For example, in many education systems a year of schooling produces only a fraction of the learning that is possible (fi gure O.7). Chapter 3 presents cross-country comparisons for 157 economies globally. Overview | 13 Part of the ongoing skills re - adjustment is happening outside of compulsory education and formal jobs. But where? Chap- ter 4 answers this question by exploring three domains—early childhood, tertiary education, and adult learning outside jobs— where people acquire specifi c skills that the changing nature of work requires. Investments in early child- hood, including in nutrition, health, protection, and educa- tion, lay strong foundations for the future acquisition of higher- order cognitive and sociobehav- ioral skills. From the prenatal period to age 5, the brain’s ability to learn from experience is at its highest. Individuals who acquire such skills in early childhood are more resilient to uncertainty later in life. Tertiary education is another opportunity for individ- uals to acquire the higher-order general cognitive skills—such as complex problem-solving, critical thinking, and advanced communication—that are so important to the changing nature of work but cannot be acquired through schooling alone. As for the current stock of workers, especially those who cannot go back to school or to university, reskilling and upskilling those who are not in school or in formal jobs must be part of the response to technology-induced labor market disruption. But only rarely do adult learning programs get it right. Adults face various binding constraints that limit the effectiveness of traditional approaches to learning. Better diagnosis and evaluation of adult learning programs, along with better design and better delivery of those programs, are needed. Chapter 4 explores these issues in greater detail. Work is the next venue for human capital accumulation after school. Chapter 5 evaluates how successful economies have been in generating human capital at work. Advanced economies have higher returns to work than emerging economies. A worker in an emerging economy is more likely than a worker in an advanced economy to fi nd herself in a manual occupa- tion that is composed largely of physical tasks. An additional year of work in cognitive professions increases wages by 3 percent, whereas for manual occupations the fi gure is 2 percent. Work provides a venue for a prolonged acquisition of skills after school—but such opportunities are relatively rare in emerging economies. FIGURE O.7 Learning varies across"