HUMAN DEVELOPMENT INDEX .. A FOCUS

Human Development Index (HDI)
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.
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.
Refer to the Statistics [614 KB] for more details
and the HDR 2013 Technical Notes English [153
KB].
The HDI facilitates instructive comparisons of the
experiences within and between different
countries.
To learn more:
Interactive data tools
The disaggregated HDI
One way the use of the human development
index has been improved is through
disaggregation. A country's overall index can
conceal the fact that different groups within the
country have very different levels of human
development. 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. The analysis made possible by the
use of the disaggregated HDIs should help guide
policy and action to address gaps and
inequalities.
Disparities may already be well known, but the
HDI can reveal them even more starkly.
Disaggregation by social group or region can also
enable local community groups to press for more
resources as well as to force accountability on
local representatives, making the HDI a tool for
participatory development.
Disaggregated HDIs have been used extensively
for analysis since their inception.
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). The IHDI will be equal to
the HDI value when there is no inequality, but
falls below the HDI value as inequality rises. The
difference between the HDI and the IHDI
represents the ‘loss’ in potential human
development due to inequality and can be
expressed as a percentage. In 2012 the IHDI was
calculated for 132 countries and the results are
telling. For example, United States suffers a loss
of more than 12% when its HDI value is adjusted
for inequalities and moves 13 places down in
rank.
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.
It is difficult to use the HDI to monitor changes in
human development in the short-term because
two of its components, namely life expectancy
and mean years of schooling change slowly. To
address this limitation, components that are
more sensitive to short-term changes could used
for national purposes, possibly under a different
name. For example, the rate of employment, the
percent of population with access to health
services, or the daily caloric intake as a
percentage of recommended intake could be
used in place of the traditional indicators of the
HDI.
Thus, the usefulness and versatility of the HDI as
an analytical tool for HD at the national and sub-
national levels would be enhanced if countries
choose components that reflect their priorities
and problems and are sensitive to their
development levels, rather than rigidly using the
three components presented in the HDI of the
global HDRs.
As previously mentioned, when adjusting the HDI
to reflect additional concerns, a commitment to
data integrity and rigorous attention to statistical
protocol should always be a concern of
paramount importance.
Highlighting uneven development:
comparing relative levels of HDI and
per capita income
National wealth has the potential to expand
people's choices. However, it may not. The
manner in which countries spend their wealth,
not the wealth itself, is decisive. Moreover, an
excessive obsession with the creation of material
wealth can obscure the ultimate objective of
enriching human lives. In many instances,
countries with higher average incomes have
higher average life expectancies, lower rates of
infant and child mortality and higher educational
attainment and school enrollment, and
consequently a higher human development index
(HDI). But these associations are far from perfect.
In inter-country comparisons, income variations
tend to explain not much more than half the
variation in life expectancy, or in infant and child
mortality. And they explain an even smaller part
of the differences in adult educational
attainment.
Although there is a correlation between material
wealth and human well-being, it breaks down in
many societies. Many countries have high GNI
per capita, but low human development
indicators and vice versa, while some countries at
similar levels of GNI per capita have vastly
different levels of human development.
Given the imperfect nature of wealth as gauge of
human development, the HDI offers a powerful
alternative to GDP and GNI for measuring the
relative socio-economic progress at national and
sub-national levels. Comparing HDI and per
capita income ranks of countries, regions or
ethnic groups within countries highlights the
relationship between their material wealth on the
one hand and their human development on the
other. A negative gap implies the potential of
redirecting resources to Human Development.