ANKARA, February 12, 2026- Current deficits in health, education, and skill development at work are costing low- and middle-income countries 51% of their future labor earnings, according to a new World Bank Group report released today. In Türkiye existing deficits are costing 42% of future earnings. Over the past 15 years, even as incomes have risen and poverty has declined, two-thirds of low- and middle-income countries have experienced declines in nutrition, learning, or workforce skills. While Türkiye has improved its learning outcomes and student test scores in 2025 are 64 points above those of 2010, reversing these deficits in most low- and middle-income countries will require a new approach to human capital investments.

The report, Building Human Capital Where It Matters: Homes, Neighborhoods and Workplaces, finds that 86 out of the 129 low- and middle-income countries experienced declines in either nutrition, learning, or workforce skill development between 2010 and 2025. Rising incomes and reductions in poverty have failed to translate into stronger human capital outcomes. The report calls for broader investments in homes, neighborhoods, and workplaces - real-world settings that shape human capital.

"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 labor productivity and the types of jobs their economies can sustain in the future," said Mamta Murthi, World Bank Group Vice President for People. "Broadening investments in human capital to include the home, the neighborhood, and the workplace can activate these settings that shape people's lives and increase overall human capital accumulation."

According to the report:

• Homes: Skill gaps linked to family circumstances emerge before age five - before most children in low- and middle-income countries start school - and remain virtually constant throughout adolescence. Income alone does not offset poor care environments, which lower test scores and increase depression. The report found high rates of violent discipline at home, suggesting significant room for improvements in care at home.
• Neighborhoods: New evidence suggests that children who grow up in wealthier neighborhoods earn twice as much as those from poorer ones, even when their parents share the same income and education levels. Neighborhoods shape opportunities beyond access to schools and clinics. Exposure to pollution, crime, or poor infrastructure directly affects health, learning, and skills development.
• Workplaces: In low- and middle-income countries, self-employed workers earn only half as much for each additional year of experience as wage workers. Yet 70% of workers in these countries are in small-scale agriculture, low-quality self-employment, or micro firms - jobs that generally provide limited formal training and on-the-job learning. Labor force participation gaps further limit skill accumulation - around 50% of women are out of the labor force, and around 20% of youth are neither studying nor working.

Türkiye: Selected Findings

• Türkiye shows notable gains in learning where many countries saw stagnation or decline. The Harmonized Learning Outcomes for Türkiye rose from 445 in 2010 to about 509 in 2025.
• Positive neighborhood interactions have been beneficial among some, such as youth or adults vulnerable to violent behavior. Our Future Our Dream program in Türkiye among academically strong but socially disruptive adolescents reduced their antisocial behavior and assisted them in gaining admission to more highly selective secondary schools, thereby improving schools and communities

Launch of the Human Capital Index Plus (HCI+)

A newly expanded global index, the Human Capital Index Plus (HCI+), launched alongside this report, provides new country- and regional-level data tracking human capital accumulation from birth to age 65 and a metric for how gaps translate into forgone future labor earnings. For the first time, it captures how human capital gains - or losses - in the labor market affects lifetime productivity. HCI+ looks at country outcomes in 3 key areas-Health, Education, and Employment. Each point in the index corresponds to a one percent difference in expected lifetime earnings potential, making it possible to translate gains in education, health, or job quality into income terms.

It will help each country answer questions such as:

• Where are the largest human capital gaps-health, education, or employment in my country?
• How much would productivity and people's future labor earnings rise if learning outcomes improved?
• How much do employment differences between men and women contribute to earnings gaps?

HCI+ result for Türkiye:

• Türkiye's HCI+ score in 2025 is 228 points, which is lower than the average for the Europe and Central Asia region (238) but higher than the average for Upper Middle-Income countries (205).
• Türkiye's score of 33 in the employment pillar is lower than the median for the Europe and Central Asia region (48) and also lower than the median for Upper Middle-Income countries (41).
• There is a 34-point gap in the HCI+ score for females (211) compared to males (245). If this gap were to be closed, Türkiye's overall HCI+ score would increase from 228 to 245 and its future earnings would be higher by 16%.
• If Türkiye increases its effective years of schooling to 12 years, it can lift expected labor earnings by about 4.7% over the long-term.

"The evidence suggests that policies that consider the drivers of human capital in each setting can improve nutrition, learning, and skill development at work. By enabling more people to build skills throughout life, countries can spark a 'virtuous cycle' - where rising productivity leads to higher wages and greater incentives for families and communities to invest in the next generation," said Norbert Schady, World Bank Group Chief Economist for People.

The report recommends:

• Parenting and preschool programs that promote early learning and improve children's care environments.
• Targeting struggling neighborhoods, with a focus on increasing nutrition, learning, and on-the-job skill development through collaboration among all government departments, not just those focused on education and health.
• Reforming labor markets to expand apprenticeships, childcare, and on-the-job learning.
• Promoting policies that integrate public services within homes, neighborhoods, and workplaces, and an ambitious data agenda to track progress.