The development of human capital is a cumulative process that begins in childhood – and even before birth – and continues throughout the life cycle. This process starts with investment in the health and nutrition of the expectant mother, followed by the child’s health, nutrition, and education in later stages. In fact, this investment is not merely social spending without economic returns; the returns on investment in human capital are not limited to increasing an individual’s income upon reaching working age, but extend to the economy as a whole, raising gross domestic product (GDP). A $1 investment in human capital development – particularly in health and education – yields an estimated return of up to $11.39 in GDP.
In the latest revised edition of the Human Capital Index (HCI+) for 2026, Egypt scored 161 points out of 325, indicating a low level of human capital in the country. Regardless of the successive adjustments the World Bank makes to the index’s calculation methodology, its results – despite differences in measurement approaches and their evolution – remain largely consistent, confirming persistent shortcomings in investment in children in Egypt, particularly in health, education, and nutrition. There is no doubt that if the situation remains as it is, it threatens current and future generations, with all the repercussions this entails for both society and the economy.
This study seeks to analyze the relationship between Egypt’s low Human Capital Index and indicators of child deprivation – particularly in health, education, and nutrition – as well as multidimensional poverty indicators, and the resulting consequences. These indicators provide a more comprehensive picture than the current index does and reveal spatial development gaps between rural and urban areas, which must be taken into account when designing development interventions. In this context, the study emphasizes the need to expand the scope of current indicators for measuring human capital in Egypt, on the one hand, and to account more fully for spatial disparities when designing the revised index, on the other. At the public policy level, the study seeks to underscore the need to invest in children from an integrated perspective, thereby contributing to an improvement in the human capital index and the resulting benefits for families, society, and the economy.
An Overview of the State of Human Capital in Egypt: Stagnation and Slowdown
Human capital consists of the knowledge, skills, and health capabilities of individuals that are invested in and accumulate over the course of their lives, enabling them to realize their potential as productive members of society. Investing in people – through the provision of nutrition, health care, quality education, jobs, and skills – also helps develop human capital. Methodologies for measuring human capital have evolved rapidly over the past few years, since the World Bank launched the Human Capital Project. The first version of the index consisted of a set of sub-indices related to education and health, with values ranging from 0 to 1. Egypt scored 0.49 on this index, meaning that a child born at the time of its release would be able to realize only 49% of their productive potential upon reaching working age, because of incomplete access to quality education and health care. Some of the sub-indicators are outlined below:
- Probability of surviving to age five: Egypt scored very high on this indicator, with a survival rate of 98 out of every 100 children.
- Expected years of schooling: This indicator measures the number of years a child is expected to attend school from age four through age 18. In Egypt, this figure stands at 11.5 years, meaning a child is expected to spend 11.5 years in school by the time they turn 18. However, this figure drops to 6.5 years when adjusted for the quality of learning – that is, measuring what the child has actually acquired during those 11.5 years – which highlights the role of poor educational quality in undermining human capital in Egypt. This is confirmed by Egyptian students’ Average Harmonized Test Score, an international measure of student performance, which stood at 356 on a scale ranging from 300 to 625, reflecting the low quality of education in Egypt.
The results become even bleaker when analyzing data from the Utilization-Adjusted Human Capital Index (UHCI), as Egypt’s UHCI value drops to 0.20. This index focuses on measuring the proportion of the working-age population that is employed, adjusting for how fully human capital is put to use in employment. Its value in Egypt indicates that children born at the time the index was published will be able to utilize only 20% of their productive potential when they reach working age. More alarmingly, the adjusted index reveals a significant gender gap, with a value of 0.30 for males, compared to only 0.09 for females. This differs from the results of the unadjusted index, which showed a high degree of parity between males and females, with a slight advantage for females: the index stood at 0.51 for females compared to 0.48 for males.
With the release of the adjusted version of the Human Capital Index for 2026, Egypt scored 161 points out of 325, keeping it in the same low range. The index score for females was 134 points, compared to 186 points for males, highlighting the gender gap. The revised index consists of three sub-indices: health, education, and employment (combined into a single index). The education and employment sub-indices recorded strikingly low scores. While the health sub-index scored 43 out of 50, the education sub-index scored 95 out of 188, and the employment sub-index did not exceed 22 out of 87. In fact, the sub-indicators adopted by the World Bank to measure health and education are insufficient and do not reflect the true state of these two sectors in Egypt. For example, the measurement of health was limited to only two indicators: the probability of surviving to age 60 and the probability of not being stunted, while ignoring important indicators such as anemia, underweight, obesity, and child mortality, which collectively reflect the health and nutritional status of children in Egypt. Similarly, the sub-indicators used to measure education were limited to expected years of schooling, learning outcomes, and completion of university education. The latter two indicators recorded particularly low values, pointing to issues related to the quality of education and the accumulation of inequality across its various stages. While official data confirm that the primary school enrollment rate is close to 100%, the university completion rate does not exceed 26 points out of 100.
Child Deprivation Indicators – Demographic, Geographical, and Gender Gaps
Child deprivation indicators span poverty, health, nutrition, and education, and they further highlight the low levels of human capital in Egypt.
- Multidimensional Poverty
According to the results of a multidimensional poverty analysis in Egypt, 16.9% of children aged 0 to 17 suffer from multidimensional poverty, meaning that one in every six children experiences deprivation in two or more dimensions of well-being. The results indicate that children under the age of five are the most vulnerable to deprivation, with a rate of 20.8%. Clear disparities exist between rural and urban areas: the poverty rate among rural children aged 0 to 4 years is 23.9%, compared to 14.7% in urban areas, while the poverty rate among children aged 0 to 17 in rural areas is 21%, compared to 9.6% in urban areas. As for gender differences, the results indicate a convergence in multidimensional poverty rates, with the rate standing at 16.6% among males, compared to 17.2% among females.
- Health and Nutritional Deprivation Indicators
Health and nutrition indicators are intertwined; a child’s health is influenced by the mother’s health during pregnancy and breastfeeding, the health care available to the child, as well as the quality and quantity of food. Although many indicators have improved over the past decade, data from the 2021 Egyptian Family Health Survey showed a decline in this indicator, which is a key determinant of various indicators of a child’s health status, including mortality rates, weight and height deficiencies, and others.
- Prevalence of Anemia Among Children Aged 6 to 59 Months
This age group represents the foundational stage in a child’s physical, mental, and psychological development, making it one of the most critical periods in a child’s life. This may explain why so many interventions focus on the “first 1,000 days” of a child’s life. According to the 2021 Egyptian Family Health Survey, the prevalence of mild anemia is 21%, moderate anemia is 21%, and severe anemia is 1%, meaning that approximately 43% of children in this age group suffer from varying degrees of anemia. Comparing these figures with those from the 2014 Demographic and Health Survey, it is clear that the prevalence has risen from 27% in 2014 to 43% in 2021. The data also reveal clear geographical disparities, particularly in the Upper Egypt governorates, where the prevalence of anemia stands at 45.2% in urban and rural areas combined, rising to 46.7% in rural Upper Egypt and peaking at 49.1% in the border governorates.
- Prevalence of Anemia Among Females and Males Aged 10 to 19
The prevalence of anemia is not limited to children aged 6 to 59 months but extends to older age groups, making it a chronic problem with both gender-specific and geographic dimensions. According to the 2021 Egyptian Family Health Survey, the prevalence of anemia among females is 34%, compared to 29% among males.
- Stunting Rate Among Children Under Five
The stunting rate among children under five is 12.8%, rising to 15.2% in Upper Egypt governorates, 16.2% in rural Upper Egypt, and 16.3% in border governorates. The rate among the poorest quarter of the population reaches 16.8%.
The under-five mortality rate is 28 deaths per 1,000 live births, with 24 deaths in urban areas compared to 32 deaths in rural areas, rising to 39 in rural Upper Egypt.
- Nutritional Status Indicators and Their Health Implications
UNICEF has defined child food poverty as the inability of children to consume a varied, nutrient-rich diet drawn from different food groups during early childhood. Based on an analysis of data from the 2021 Egyptian Family Health Survey and previous surveys, UNICEF confirmed in its global report on child food poverty that 58% of children aged 6 to 23 months suffer from food poverty, as they consume fewer than five of the eight recommended food groups. Thirty-six percent of children in the same age group suffer from moderate food poverty, consuming three to four food groups, while 22% suffer from severe food poverty, consuming two or fewer of the eight food groups.
In addition to the stunting rate mentioned earlier, the results of the 2021 Egyptian Family Health Survey showed that 45% of boys and 42.2% of girls aged five to nine have weights that fall outside the normal range for their height, and most of them are underweight. In the 15- to 19-year-old age group, the rate was 29.6% among male adolescents and 39.7% among female adolescents.
Malnutrition leads to poor health and chronic diseases in later stages of children’s lives, negatively affecting academic achievement as a result of cognitive deficits and diminished mental abilities. The growing imbalances in children’s nutritional status cannot be separated from the continuous rise in inflation rates and the accompanying sharp increase in food prices. A survey of 6,000 poor and near-poor households by the International Food Policy Research Institute, which aimed to monitor the impact of inflationary pressures and rising food prices on their consumption patterns, found that these households are the most affected by rising food prices, given that they allocate the largest portion of their income to food expenditures. The study revealed that 85% of the households surveyed reduced their meat consumption, while 75% of respondents cut back on chicken and eggs – nutrient-rich foods that help prevent anemia. These findings are consistent with a 2022 telephone survey conducted by the Central Agency for Public Mobilization and Statistics, which revealed that rising food prices prompted 74% of households to change their dietary patterns by reducing their protein intake.
- Indicators of Educational Deprivation
According to the second edition of the Sustainable Development Goals Localization Reports issued by the Ministry of Planning and Economic Development, Egypt is far from achieving the goal of quality education. Based on the calculation methodology adopted by Egypt – which follows the Organization for Economic Cooperation and Development (OECD) formula, under which governorates’ performance is measured on a scale ranging from 0 to 100 points – Port Said Governorate ranked first among Egyptian governorates with a score of 69 points, while 14 governorates scored below 50 points, and nine governorates fell within the range of 0 to 25 points.
Educational quality and geographic disparities in access to education are among the most significant challenges facing the education system, and their effects are felt most acutely by poor children. There is a close relationship between poverty, the educational level of the head of the household, and school dropout rates, especially in the presence of factors that drive children away from school, such as poor educational quality, high costs, and the family’s need for the child to work. Numerous indicators point to a deterioration in educational quality, which is more acute in the poorest geographic areas.
- Class Size in Pre-University Education
According to the Annual Bulletin on Pre-University Education for the 2023-2024 school year, and the book “Egypt in Figures 2025,” Egypt is experiencing a significant increase in classroom density, which peaks at the primary level, with an average of 50 students per class, before declining slightly to 48 students in lower secondary school and then to 42 students in upper secondary school. The governorates of Assiut, Qalyubia, Giza, and Minya top the list of governorates with the highest student density at the primary level, with class sizes reaching 56 students in Assiut and 55 students in Giza, Qalyubia, and Minya. The situation is not much different at middle school, where class sizes reach 50 students or more in the governorates of Giza, Beni Suef, Menoufia, Minya, Assiut, Fayoum, and Qalyubia. Class sizes decrease slightly at the high school level due to dropout rates across the educational stages, but they remain high, reaching 44 students per class. High class sizes are inseparable from the decline in the quality of education, and they contribute to a school environment that is unwelcoming to students.
- Quality of Educational Outcomes
According to the UNICEF report, more than half of children (56%) cannot read a simple text by the age of 10. Furthermore, results from the Progress in International Reading Literacy Study (PIRLS) showed that 45% of fourth-grade students in Egypt fell into the low proficiency category in reading in 2021. Gender gaps persist, with girls outperforming boys by 16 points in the same year. A national assessment conducted by Egypt’s National Center for Examinations and Educational Evaluation in 2021 yielded similar results, revealing that 30.2% of fourth-grade students did not meet the expected minimum level of skills and knowledge, while only 47.3% met the required minimum level.
- Multidimensional Disparities in Enrollment and Dropout Rates
Although enrollment rates in primary school are high – exceeding 95%, with slight variations between rural and urban areas – the gap widens as students advance to higher levels of education. Enrollment rates in middle school drop to 78% nationwide, falling to 73% in rural Upper Egypt and then to 66.7% in the border governorates. The situation worsens at the high school level, where rates stand at 70% in urban areas, compared to 58% in rural areas. This disparity is reflected in the Human Opportunities Index, which stands at 63.3% in urban areas compared to 50.3% in rural areas – a difference of 13 percentage points. This means that half of rural youth of secondary school age have equal opportunities to enroll in this stage, compared to about two-thirds of urban youth. Naturally, the poorest groups are the most vulnerable to exclusion from education at this stage.
It is clear from the above that the forms of deprivation experienced by children intersect with specific geographic areas, underscoring the spatial dimension of poverty and its associated deterioration of basic health and education services, as well as the increased nutritional burden resulting from poverty, since household poverty goes hand in hand with the deprivation of the local community as a whole of essential basic services.
A comprehensive reading of child deprivation indicators confirms that they are not merely a consequence of poverty, but rather a fundamental mechanism that reproduces poverty across generations and hinders the process of building human capital. Deprivation begins at birth, as evidenced by the prevalence of anemia, meaning that nearly half of all children enter school suffering from deficiencies in various indicators of physical, cognitive, and intellectual development. Shortfalls in educational access and quality then make the school environment unwelcoming, especially for the most vulnerable groups. As a result, children’s potential and abilities are squandered before they reach working age. Of course, successive waves of inflation and rising food prices have played a role in exacerbating these outcomes.
Consequently, the Human Capital Index should be reexamined to integrate indicators it does not currently include and to provide a genuine and realistic baseline for existing indicators, through which the role of social policies and development interventions in addressing the aspects of compound deprivation experienced by children can be assessed. At the policy level, a radical shift is required: from sectoral responses to integrated packages; from equal distribution to spatial targeting to address the severity of deprivation in rural areas; from social spending to social investment; and, finally, from measuring inputs to measuring outcomes.
Recommendations: The Need for Radical Changes in Health, Education, and Nutrition Policies Related to Children from an Integrated Perspective
The proposed interventions are based on the fundamental premise that achieving equality of opportunity is the key criterion, which necessitates the formulation of policies and interventions that respond to the real needs of vulnerable groups and the marginalized areas where they are concentrated, targeting both the family and the local community simultaneously. Poverty and deprivation are not limited to household poverty; rather, the deprivation of local communities of quality educational and health services constitutes another aspect of household poverty, as confirmed by the multidimensional poverty approach. The required social investment is an investment in the family through social protection and basic services, and an investment in the local community through comprehensive development. Accordingly, the recommendations are divided into three pillars:
- From Sectoral Responses to Integrated Packages
- Current policies operate in silos through largely fragmented programs and consequently fail to address the compound deprivation experienced by children. Therefore, it is essential to establish a unified program for investment in children that integrates health, nutrition, and educational interventions, while working to bridge the age gaps during which children receive no services or support – such as the period from age two until school entry at age six for children enrolled in the “First 1,000 Days of a Child’s Life” program, who are from families covered by the “Takaful” conditional cash transfer program, or the period from birth to age six for the remaining children, who receive no mandatory services at this stage other than routine vaccinations.
- Expand the scope of nutrition programs, improve the quality of benefits provided, and ensure coordination among them by extending the coverage of the “First 1,000 Days of a Child’s Life” program to include all children in governorates with high rates of deprivation, rather than limiting it to children from families benefiting from the “Takaful” program, which covers only 4.7 million families. This should be accompanied by expanding the coverage of the school feeding program to include all days of the school year, improving the quality of meals, and increasing their nutritional value by transitioning from date-flavored biscuit bars to locally produced hot meals.
- Address the age gap not covered by nutrition programs – between the first 1,000 days and the age of six – by considering the adoption of the “first 8,000 days” framework in a child’s life, as advocated by many international development institutions. Although the first 1,000 days are crucial for supporting a child’s rapid physical growth and psychological, neurological, and cognitive development, they are insufficient to ensure the development of human capital, which requires a longer timeframe extending from the prenatal stage through adolescence. The World Bank’s report on child and adolescent health, development, and growth is the source of this concept; it emphasized that the additional 7,000 days are essential for ensuring the development of human capital in terms of educational achievement and lifelong health. This requires significant investments in health, nutrition, and education, tailored to the needs and requirements of each stage. Deficiencies in nutrition and health care after the first 1,000 days significantly diminish the value of the investment made during that period.
- Improve the quality of services provided in primary health care units – especially in areas where maternal and child health indicators are declining – by staffing them with the necessary medical specialties and supplying them with diagnostic equipment, designating special clinics for children, and establishing a mandatory program for families to monitor their children’s growth.
- Restore school health units, which have played a crucial role for decades in monitoring children’s growth through vision and weight screenings and other indicators that help prevent health problems early on.
- Break the vicious cycle between education and poverty by addressing both the demand for and the supply of education simultaneously, through the provision of free basic education that guarantees every child the opportunity to enroll, with full exemption from school fees and the provision of school uniforms and supplies. At the same time, stimulate demand for education by improving its quality and increasing its returns through various interventions, including the implementation of programs that group students according to their levels in reading, writing, and arithmetic, rather than relying on grade-based grouping to compensate for educational gaps.
- From Equal Distribution of Allocations and Investments to Spatial Targeting
Indicators reveal that deprivation is not evenly distributed; therefore, resources must be geographically prioritized by directing the largest share of investments in health, education, and food toward the most deprived governorates and the poorest regions, particularly the rural areas of Upper Egypt.
- From Social Spending to Social Investment
Changing the perception of social spending from a burden on the budget to an investment in the future is no easy task, given the debt burden and interest payments, which have a serious negative impact on all aspects of social spending in Egypt. Nevertheless, all economic evidence confirms that failing to spend or reducing spending is far more dangerous, as the economic losses resulting from a decline in the human capital index affect the economy, society, and families alike. This calls for a child-sensitive budget.
The views represented in this paper are those of the author(s) and do not necessarily reflect the views of the Arab Reform Initiative, its staff, or its board.
