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Human Development Index

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Human Development Index

Summary: The Human Development Index (HDI) value is a composite index measuring average achievement in three basic dimensions of human development—a long and healthy life, knowledge and a decent standard of living.

Main Points: The first Human Development Report introduced a new way of measuring development by combining indicators of life expectancy, educational attainment and income into a composite human development index, the HDI (see Figure 1). The breakthrough for the HDI was the creation of a single statistic which was to serve as a frame of reference for both social and economic development. The HDI sets a minimum and a maximum for each dimension, called goalposts, and then shows where each country stands in relation to these goalposts, expressed as a value between 0 and 1.

The education component of the HDI is now measured by mean of years of schooling for adults aged 25 years and expected years of schooling for children of school entering age. Mean years of schooling is estimated based on educational attainment data from censuses and surveys available in the UNESCO Institute for Statistics database and Barro and Lee (2010) methodology). Expected years of schooling estimates are based on enrolment by age at all levels of education and population of official school age for each level of education. Expected years of schooling is capped at 18 years. The indicators are normalized using a minimum value of zero and maximum values are set to the actual observed maximum value of mean years of schooling from the countries in the time series, 1980–2012, that is 13.3 years estimated for the United States in 2010. Expected years of schooling is maximized by its cap at 18 years. The education index is the geometric mean of two indices.

The life expectancy at birth component of the HDI is calculated using a minimum value of 20 years and maximum value of 83.57 years. This is the observed maximum value of the indicators from the countries in the time series, 1980–2012. Thus, the longevity component for a country where life expectancy birth is 55 years would be 0.551.

For the wealth component, the goalpost for minimum income is $100 (PPP) and the maximum is $87,478 (PPP), estimated for Qatar in 2012.

The decent standard of living component is measured by GNI per capita (PPP$) instead of GDP per capita (PPP$) The HDI uses the logarithm of income, to reflect the diminishing importance of income with increasing GNI. The scores for the three HDI dimension indices are then aggregated into a composite index using geometric mean.

The disaggregated HDI

Disaggregated HDIs are arrived at by using the data for the HDI components pertaining to each of the separate groups; treating each group as if it was a separate country. Such groups may be defined relative to income, geographical or administrative regions, urban/rural residence, gender and ethnicity. Using disaggregated HDIs at the national and sub-national levels helps highlight the significant disparities and gaps: among regions, between the sexes, between urban and rural areas and among ethnic groups.

Adjusting the HDI for inequalities

In 2010, the Inequality-adjusted HDI (IHDI) was introduced. The IHDI is the HDI adjusted for inequalities in the distribution of achievements in each of the three dimensions of the HDI (health, education and income).

Country-specific HDIs

To reflect country-specific priorities and problems and to be more sensitive to a country's level of development, the HDI appearing in the global HDRs can be tailored so that additional components are included in the calculation. HDI adjustments should utilize the methods of weighting and normalization as the original HDI, making use of maximum and minimum values to create an index for the added component. In addition, indicator-specific weights can be tailored such that they reflect national policy priorities.

Additional adjustments to the HDI could involve expanding the breadth of existing component indices. For example, the life expectancy category could be adjusted to reflect under-five or maternal mortality rates; the income component could be adjusted to reflect unemployment, incidence of income poverty or the Gini-corrected mean national income; and finally the educational component can be adjusted to include the number of students enrolled in particularly important fields of study, such as the mathematics and sciences.

Access to database:

Source: HDRO calculations based on data from UNDESA (2011), Barro and Lee (2011), UNESCO Institute for Statistics (2012), World Bank (2012) and IMF (2012).

Page Created By:  Madina Junussova. The content presented on this page is drawn directly from the source(s) cited above, and consists of direct quotations or close paraphrases. This material does not necessarily reflect the official view of the publishing organization.

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School of Public Policy and Governance