Unit 2: Human Development Index (HDI)

The Human Development index is a measure of economic development and economic welfare. The Human Development Index examines three important criteria of economic development (life expectancy, education and income levels) and uses this to create an overall score between 0 and 1.

1 indicates a high level of economic development, 0 a very low level.

The HDI combines:

1. Life Expectancy Index. Average life expectancy compared to a global expected life expectancy..
2. Education Index
   1. mean years of schooling
   2. expected years of schooling
3. Income Index (GNI at PPP)

Components of the Human Development Index

What the HDI shows.

• The HDI give an overall index of economic development. It has some limitations and excludes several factors that might have been included, but it does give a rough ability to make comparisons on issues of economic welfare – much more than just using GDP statistics show.

Limitations of Human Development Index

• Wide divergence within countries. For example, countries like China and Kenya have widely different HDI scores depending on the region in question. (e.g. north China poorer than south east)
• HDI reflect long-term changes (e.g. life expectancy) and may not respond to recent short-term changes.
• Higher National wealth GDI may not necessarily increase economic welfare, it depends how it is spent.
• Also higher GDI per capita may hide widespread inequality within a country. Some countries with higher real GDI per capita have high levels of inequality (e.g. Russia, Saudi Arabia)
• However, HDI can highlight countries with similar GDI per capita but different levels of economic development.
• Economic welfare depends on several other factors, such as – threat of war, levels of pollution, access to clean drinking water e.t.c.

Top 10 Human Development Index

Components of HDI score 2011

			(HDI)		Life expectancy at birth		Mean years of schooling		Expected years of schooling		(GNI) per capita
HDI rank			Value		(years)		(years)		(years)		(Constant 2005 PPP$)
			2011		2011		2011a		2011a		2011
1	Norway		0.943		81.1		12.6		17.3		47,557
2	Australia		0.929		81.9		12.0		18.0		34,431
3	Netherlands		0.910		80.7		11.6	b	16.8		36,402
4	United States		0.910		78.5		12.4		16.0		43,017
5	New Zealand		0.908		80.7		12.5		18.0		23,737
6	Canada		0.908		81.0		12.1	b	16.0		35,166
7	Ireland		0.908		80.6		11.6		18.0		29,322
8	Liechtenstein		0.905		79.6		10.3	c	14.7		83,717
9	Germany		0.905		80.4		12.2	b	15.9		34,854
10	Sweden		0.904		81.4		11.7	b	15.7		35,837

Lowest 10 Counties for HDI

			(HDI)		Life expectancy at birth		Mean years of schooling		Expected years of schooling		(GNI) per capita
177	Eritrea		0.349		61.6		3.4		4.8		536
178	Guinea		0.344		54.1		1.6	w	8.6		863
179	Central African Republic		0.343		48.4		3.5		6.6		707
180	Sierra Leone		0.336		47.8		2.9		7.2		737
181	Burkina Faso		0.331		55.4		1.3	r	6.3		1,141
182	Liberia		0.329		56.8		3.9		11.0		265
183	Chad		0.328		49.6		1.5	i	7.2		1,105
184	Mozambique		0.322		50.2		1.2		9.2		898
185	Burundi		0.316		50.4		2.7		10.5		368
186	Niger		0.295		54.7		1.4		4.9		641
187	Congo (Democratic Republic of the)		0.286		48.4		3.5		8.2		280

Notes:

Before 2011, the human development index used adult literacy rates rather than mean years of schooling.

The human development index was created by Mahbub ul Haq, and Amartya Sen.