Reproducibility package for The Contribution Of Human Capital To Current And Future Growth: An Extension Of The World Bank’s Long-Term Growth Model (LTGM-HC)

This paper presents the Long-Term Growth Model – Human Capital Extension (LTGM-HC), a publicly available, spreadsheet-based toolkit that projects human capital of the workforce from 2025 to 2100 for 153 countries. The LTGM-HC simulates how pre-tertiary years of schooling, education quality, and health across age cohorts affect current and future workforce productivity. While primarily designed for country-level analysis, the paper produces three sets of general results. First, we provide new estimates of the current rate of human capital growth for 153 countries, which differ substantially from those in the Penn World Tables. Global average human capital growth is almost 1% 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, we provide new estimates of the pace of future human capital growth. We find that, without future policy reforms, global average human capital growth will likely 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, we provide new estimates of the likely contribution of human capital to current and future economic growth. In our 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% higher by 2100. However, about two-thirds of these gains reflect the reforms already 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.