Where did you accumulate most of your human capital? You may think it was in school, but you would be forgetting an equally important setting: the workplace. Roughly half of your human capital was probably gained on the job. Yet, workplace skill development remains largely absent from the human capital policy agenda, which means we are missing opportunities to improve worker productivity and earnings.
People build skills at work not only through formal training, but through experience: solving problems, using technology, interacting with colleagues and customers, adapting to new tasks, and learning from managers and peers. Factories, offices, and farms do not get adequate attention as settings where human capital is built.
A job is not just an income. It is a learning environment.
Most adults spend far more years working than studying. Farmers learn by experimenting with new techniques and technologies to boost yields. The self-employed develop skills to expand their businesses and increase earnings. Wage workers acquire (general and firm-specific) experience that can improve their performance or allow them to advance to jobs with stronger learning potential. Our global analysis of labor force surveys finds that work experience and education contribute roughly equally to the skills people carry through life, a finding backed by other studies across the globe (Figure 1).
This is why the World Bank’s jobs agenda, which aims to help countries create more and better jobs, depends on what happens inside the workplaces as it does on the number of jobs created. A job is not just an income. It is a learning environment.
Workplaces in low- and middle-income countries do not foster sufficient learning
Relatively few people in low- and middle-income countries have an opportunity to build human capital at work. Why?
First, to build human capital at work, you need to be employed. In low- and middle-income countries, around 50 percent of women are out of the labor force, while around 20 percent of youth are neither studying nor working.
Second, you need to be employed in a job that helps you learn. Evidence from our latest report Building Human Capital Where It Matters Homes, Neighborhoods, and Workplaces shows that employment in low- and middle-income countries is concentrated in jobs where little learning occurs. About 70 percent of workers in low-and middle-income countries work in small-scale agriculture, low-quality self-employment, or micro firms with fewer than five workers (Figure 2), a share that is only 20 percent in high-income countries. These low-learning jobs often involve limited technology adoption, weak management practices, and little exposure to new ways of working.
