This chapter focuses on three key aspects: health, education and skills, and work. Peru is underperforming relative to its upper-middle income status in these three areas, and they seem to be particularly important for the future well-being of Peruvians and essential for social inclusion. The access to the health system is unequal. Coverage in education has expanded widely, but quality remains poor across all levels and the most socio-economically disadvantaged, especially women and the rural and indigenous population, experience significant inequality. A mismatch between existing skills and the needs of the economy is a key barrier to development. Furthermore, informal employment is still widespread, albeit declining. To overcome the persistent inequalities, Peru needs to create the incentives to formalise the labour market extensively.