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this report presents solid evidence of the impacts of the pandemic to date. It assesses the impact of the pandemic using new individual- and household-level data from low- and middle-income countries and reviews the existing literature. It extracts lessons from actions and policies implemented around the world in response to the pandemic, as well as past evidence on program effectiveness. Moreover, the report recom- mends concrete policies for the short and medium term that will help recover human capital losses from the pandemic and prepare for future shocks. It is useful to start with a working definition of human capital. Human capital refers to the health, skills, knowledge, and experience that people accumulate over their lifetime. Not just of intrinsic value, these ari- butes also make people more productive. Or, put differently, human capital is wealth embodied in people. Indeed, for many poor people around the world, their human capital is the only important source of wealth they have. Building human capital requires sustained investments along multiple dimensions. The process is sequen- tial and cumulative: skills build on earlier skills, and current skills beget future skills. 3 Although human capital can be acquired over an entire lifetime, it is built most effectively when people are young. There are a variety of reasons for this, including greater brain plasticity at early ages and the fact that younger people are generally expected to engage in activities that deliberately build skills (such as formal schooling). Any disruption to the process of building human capital can have long-lasting effects. There is evidence from earlier crises that the effects of shocks to human capital can reverberate across multiple generations. Human capital losses not only affect individuals through declines in their future earnings. They also can have negative economywide effects. Human capital is one of the main drivers of economic growth, and so, anything that erodes it, could result in lower growth rates for many years to come. Indeed, the long-term costs of the pandemic—working through the reductions in human capital caused by the pandemic—are likely to dwarf the short-term costs. 4 The erosion of human capital from the pandemic was greatest among poorer households. This erosion could lead to a sharp increase in inequality in the future—an increase that would compound the rising inequality already observed in many countries in recent decades. Lower wages, more poverty, more inequality, and less growth are an explosive mix. So what should be done? Aer quantifying the present collapse of human capital among young people under the age of 25, this report describes interventions that governments must put in place quickly to limit and reverse the damage. Concrete examples illustrate that recovery is possible if the right actions are taken. However, if countries fail to prioritize these efforts, they risk having multiple lost generations of children and young people—the workforce of tomorrow. The time to act is short. And what should governments do now to beer prepare for systemic shocks in the future? The report also discusses the kinds of agile, resilient, and adaptive human development systems that need to be in place for a country to respond to future shocks, whether an epidemic (or pandemic), a natural disaster, or an aggregate economic crisis. This is truly a case in which an ounce of prevention is worth a pound of cure, and where the costs of not preparing can be enormous. The pandemic destroyed human capital at critical moments in the life cycle The pandemic led to a sharp decline in human capital at critical stages of the life cycle. This report focuses on changes in human capital during early childhood (0–5 years), among school-age children (6–14 years), and in early adulthood (15–24 years). People younger than 25 today—those most affected by the erosion of human capital—will make up 90 percent of the prime-age workforce in 2050. 5 Poor start: The impact of the COVID-19 pandemic on early childhood development The first five years of life are a period of rapid brain development and physical growth. Early life experiences shape both the architecture and functions of the brain and can even modify which genes are expressed. 6 2 Collapse and Recovery: How the COVID-19 Pandemic Eroded Human Capital and What to Do about It

• Front Cover
• Contents
• Main Messages
• Executive Summary
• The pandemic destroyed human capital at critical moments in the life cycle
• Policies to reverse human capital losses
• Building agile, resilient, and adaptive human development systems for future shocks
• A human capital recovery: What will it take?
• Notes
• References
• Figures
• Figure ES.1 The pandemic led to steep losses in early childhood development and early learning in very young children in Bangladesh and Brazil
• Figure ES.2 During the pandemic, each month of school closures led to one month of learning losses, and more so in countries with lower GDP per capita
• Figure ES.3 Youth employment fell in most countries during the pandemic
• Figure ES.4 Declines in employment of young people during the pandemic were not offset by increases inschooling or training
• Figure ES.5 What are the paths to recovery?
• Table
• Table ES.1 There are evidence-proven policies that can reverse human capital losses