World Bank Report: Youth Face 50% Earnings Cut Due to Skill Gaps

New data shows deficits in health, education, and workforce skills costing low- and middle-income countries over half their future labor earnings.

Published on Feb. 13, 2026

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A new World Bank Group report finds that 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. The report calls for broader investments in homes, neighborhoods, and workplaces to reverse these deficits and boost human capital accumulation.

Why it matters

The report highlights that a country's prosperity depends on its ability to build and protect human capital. Gaps in nutrition, learning, and workforce skills can significantly impact future labor productivity and the types of jobs an economy can sustain. Addressing these issues across homes, neighborhoods, and workplaces is crucial for low- and middle-income countries to unlock their full economic potential.

The details

The report finds that 86 out of 129 low- and middle-income countries experienced declines in nutrition, learning, or workforce skill development between 2010 and 2025. This is costing these countries 51% of their future labor earnings. The report cites skill gaps linked to family circumstances emerging before age 5, the impact of neighborhood wealth on earnings, and the limited on-the-job learning opportunities in small-scale agriculture and self-employment as key drivers of the human capital crisis.

  • The report was released on February 12, 2026.
  • The data covers the period from 2010 to 2025.

The players

World Bank Group

An international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects and promoting economic development.

Mamta Murthi

World Bank Group Vice President for People.

Norbert Schady

World Bank Group Chief Economist for People.

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What they’re saying

“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.”

— Mamta Murthi, World Bank Group Vice President for People

“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.”

— Norbert Schady, World Bank Group Chief Economist for People

What’s next

The report recommends that countries implement parenting and preschool programs to promote early learning, target struggling neighborhoods to improve nutrition and on-the-job skill development, and reform labor markets to expand apprenticeships and on-the-job learning opportunities.

The takeaway

This report underscores the critical importance of investing in human capital across homes, neighborhoods, and workplaces to unlock economic potential and build more prosperous, productive societies in low- and middle-income countries.