# Human Development Index

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The Human Development Index (HDI) is a statistic composite index of life expectancy, education (mean years of schooling completed and expected years of schooling upon entering the education system), and per capita income indicators, which are used to rank countries into four tiers of human development. A country scores a higher HDI when the lifespan is higher, the education level is higher, and the gross national income GNI (PPP) per capita is higher. It was developed by Pakistani economist Mahbub ul Haq and was further used to measure a country's development by the United Nations Development Programme (UNDP)'s Human Development Report Office. [1] [2] [3]

## Contents

The 2010 Human Development Report introduced an Inequality-adjusted Human Development Index (IHDI). While the simple HDI remains useful, it stated that "the IHDI is the actual level of human development (accounting for inequality), while the HDI can be viewed as an index of 'potential' human development (or the maximum level of HDI) that could be achieved if there were no inequality." [4]

The index is based on the human development approach, developed by Mahbub ul Haq, anchored in Amartya Sen's work on human capabilities, often framed in terms of whether people are able to "be" and "do" desirable things in life. Examples include – being: well fed, sheltered, healthy; doing: work, education, voting, participating in community life. The freedom of choice is central – someone choosing to be hungry (as during a religious fast) is quite different from someone who is hungry because they cannot afford to buy food, or because the country is in a famine. [5]

The index does not take into account several factors, such as the net wealth per capita or the relative quality of goods in a country. This situation tends to lower the ranking for some of the most advanced countries, such as the G7 members and others. [6]

## Origins

The origins of the HDI are found in the annual Human Development Reports produced by the Human Development Report Office of the United Nations Development Programme (UNDP). These were devised and launched by Pakistani economist Mahbub ul Haq in 1990, and had the explicit purpose "to shift the focus of development economics from national income accounting to people-centered policies". Haq believed that a simple composite measure of human development was needed to convince the public, academics, and politicians that they can and should evaluate development not only by economic advances but also improvements in human well-being.

## Dimensions and calculation

### New method (2010 HDI onwards)

Published on 4 November 2010 (and updated on 10 June 2011), the 2010 Human Development Report calculated the HDI combining three dimensions: [7] [8]

In its 2010 Human Development Report, the UNDP began using a new method of calculating the HDI. The following three indices are used:

1. Life Expectancy Index (LEI) ${\displaystyle ={\frac {{\textrm {LE}}-20}{85-20}}}$

LEI is 1 when Life expectancy at birth is 85 and 0 when Life expectancy at birth is 20.

2. Education Index (EI) ${\displaystyle ={\frac {{\textrm {MYSI}}+{\textrm {EYSI}}}{2}}}$ [9]

2.1 Mean Years of Schooling Index (MYSI) ${\displaystyle ={\frac {\textrm {MYS}}{15}}}$ [10]
Fifteen is the projected maximum of this indicator for 2025.
2.2 Expected Years of Schooling Index (EYSI) ${\displaystyle ={\frac {\textrm {EYS}}{18}}}$ [11]
Eighteen is equivalent to achieving a master's degree in most countries.

3. Income Index (II) ${\displaystyle ={\frac {\ln({\textrm {GNIpc}})-\ln(100)}{\ln(75,000)-\ln(100)}}}$

II is 1 when GNI per capita is $75,000 and 0 when GNI per capita is$100.

Finally, the HDI is the geometric mean of the previous three normalized indices:

${\displaystyle {\textrm {HDI}}={\sqrt[{3}]{{\textrm {LEI}}\cdot {\textrm {EI}}\cdot {\textrm {II}}}}.}$

LE: Life expectancy at birth
MYS: Mean years of schooling (i.e. years that a person aged 25 or older has spent in formal education)
EYS: Expected years of schooling (i.e. total expected years of schooling for children under 18 years of age)
GNIpc: Gross national income at purchasing power parity per capita

### Old method (HDI before 2010)

The HDI combined three dimensions last used in its 2009 report:

This methodology was used by the UNDP until their 2011 report.

The formula defining the HDI is promulgated by the United Nations Development Programme (UNDP). [12] In general, to transform a raw variable, say ${\displaystyle x}$, into a unit-free index between 0 and 1 (which allows different indices to be added together), the following formula is used:

• ${\displaystyle x{\text{ index}}={\frac {x-a}{b-a}}}$

where ${\displaystyle a}$ and ${\displaystyle b}$ are the lowest and highest values the variable ${\displaystyle x}$ can attain, respectively.

The Human Development Index (HDI) then represents the uniformly weighted sum with 13 contributed by each of the following factor indices:

• Life Expectancy Index = ${\displaystyle {\frac {LE-25}{85-25}}}$
• Education Index = ${\displaystyle {\frac {2}{3}}\times ALI+{\frac {1}{3}}\times GEI}$
• Adult Literacy Index (ALI) = ${\displaystyle {\frac {ALR-0}{100-0}}}$
• Gross Enrollment Index (GEI) = ${\displaystyle {\frac {CGER-0}{100-0}}}$
• GDP = ${\displaystyle {\frac {\log \left(GDPpc\right)-\log \left(100\right)}{\log \left(40000\right)-\log \left(100\right)}}}$

## 2019 Human Development Index (2020 report)

The Human Development Report 2020 by the United Nations Development Programme was released on 15 December 2020, and calculates HDI values based on data collected in 2019. [13] The list comprises countries and territories with very high human development:

• = increase.
• = decrease.
RankCountry or TerritoryHDI
2019 data (2020 report) [14] Change over 5 years (2014) [15] 2019 data (2020 report) [14] Average annual HDI growth (2010-2019) [15]
1  Norway 0.957 0.20%
2 (7)  Ireland 0.955 0.65%
2   Switzerland 0.955 0.16%
4 (7)  Hong Kong 0.949 0.54%
4 (4)  Iceland 0.949 0.62%
6 (3)  Germany 0.947 0.24%
7 (3)  Sweden 0.945 0.41%
8 (2)  Australia 0.944 0.17%
8 (1)  Netherlands 0.944 0.32%
10 (6)  Denmark 0.940 0.28%
11 (2)  Finland 0.938 0.26%
11  Singapore 0.938 0.35%
13  United Kingdom 0.932 0.24%
14 (1)  Belgium 0.931 0.25%
14 (3)  New Zealand 0.931 0.30%
17 (3)  United States 0.926 0.12%
18  Austria 0.922 0.22%
19 (1)  Israel 0.919 0.29%
19 (2)  Japan 0.919 0.39%
19  Liechtenstein 0.919 0.18%
22 (2)  Slovenia 0.917 0.35%
23 (1)  South Korea 0.916 0.33%
23  Luxembourg 0.916 0.22%
European Union 0.911
25 (1)  Spain 0.904 0.40%
26 (1)  France 0.901 0.28%
27 (1)  Czech Republic 0.900 0.38%
28 (2)  Malta 0.895 0.54%
29 (2)  Estonia 0.892 0.51%
29 (1)  Italy 0.892 0.16%
31 (6)  United Arab Emirates 0.890 0.91%
32 (3)  Greece 0.888 0.29%
33  Cyprus 0.887 0.40%
34  Lithuania 0.882 0.66%
35  Poland 0.880 0.52%
36 (4)  Andorra 0.868 0.40%
37 (3)  Latvia 0.866 0.55%
38 (1)  Portugal 0.864 0.46%
39 (2)  Slovakia 0.860 0.38%
40 (1)  Hungary 0.854 0.30%
40 (4)  Saudi Arabia 0.854 0.60%
42 (6)  Bahrain 0.852 0.70%
43  Chile 0.851 0.65%
43 (2)  Croatia 0.851 0.48%
45  Qatar 0.848 0.19%
46 (2)  Argentina 0.845 0.21%
47 (6)  Brunei 0.838 0.15%
48 (2)  Montenegro 0.829 0.37%
49 (2)  Romania 0.828 0.31%
50 (3)  Palau 0.826 0.55%
51 (7)  Kazakhstan 0.825 0.86%
52 (1)  Russian Federation 0.824 0.60%
53 (4)  Belarus 0.823 0.39%
54 (5)  Turkey 0.820 1.16%
55 (1)  Uruguay 0.817 0.49%
56 (2)  Bulgaria 0.816 0.39%
57 (5)  Panama 0.815 0.58%
58 (3)  Bahamas 0.814 0.12%
60 (3)  Oman 0.813 0.43%
61 (7)  Georgia 0.812 0.87%
62 (3)  Costa Rica 0.810 0.64%
62 (1)  Malaysia 0.810 0.54%
64 (5)  Kuwait 0.806 0.25%
64 (3)  Serbia 0.806 0.57%
66 (2)  Mauritius 0.804 0.76%

The Inequality-adjusted Human Development Index (IHDI) [16] "equals the HDI when there is no inequality across people but is less than the HDI as inequality rises. In this sense, the IHDI is the actual level of human development (accounting for this inequality), while the HDI can be viewed as an index of 'potential' human development (or the maximum level of HDI) that could be achieved if there was no inequality. The 'loss' in potential human development due to inequality is given by the difference between the HDI and the IHDI and can be expressed as a percentage." The list comprises countries and territories with very high and high human development:

RankCountry2019 estimates (2020 report) [17] [18] [19]
IHDIHDIOverall loss (%)Growth since 2010
1  Norway 0.8990.9576.1 0.021
2  Iceland 0.8940.9495.8 0.055
3   Switzerland 0.8890.9556.9 0.015
4  Finland 0.8880.9385.3 0.040
5  Ireland 0.8850.9557.3 0.066
6  Denmark 0.8830.9406.1 0.025
7  Sweden 0.8820.9456.7 0.033
8  Netherlands 0.8780.9447.0 0.036
9  Slovenia 0.8750.9174.6 0.047
10  Germany 0.8690.9478.2 0.016
11  Australia 0.8670.9448.2 0.011
12  Czech Republic 0.8600.9004.4 0.042
13  Belgium 0.8590.9317.7 0.026
14  New Zealand 0.8590.9317.7NA
15  Austria 0.8570.9227.0 0.021
16  United Kingdom 0.8560.9328.2 0.032
18  Japan 0.8430.9198.3 0.053 [lower-alpha 1]
19  Estonia 0.8290.8827.1 0.051
20  Luxembourg 0.8260.9169.8 0.009
21  Hong Kong 0.8240.94913.2NA
22  Malta 0.8230.8958.0 0.033 [lower-alpha 2]
23  France 0.8200.9019.0 0.022
24  South Korea 0.8150.91611.0 0.074
25  Israel 0.8140.91911.4 0.031
26  Singapore 0.8130.93813.3NA
26  Poland 0.8130.8807.6 0.063
28  United States 0.8080.92612.7 0.004
29  Slovakia 0.8070.8606.2 0.032
30  Cyprus 0.8050.8879.2 0.048
31  Hungary 0.7910.8547.4 0.032
31  Lithuania 0.7910.88210.3 0.055
31  Greece 0.7910.88810.9 0.014
34  Italy 0.7830.89212.2 0.010
34  Latvia 0.7830.8669.6 0.050
34  Croatia 0.7830.8518.0 0.092
34  Spain 0.7830.90413.4 0.004
38  Belarus 0.7710.8236.3 0.050
39  Kazakhstan 0.7660.8257.2 0.105
40  Portugal 0.7610.85012.7 0.031
41  Montenegro 0.7490.8299.7 0.026
42  Russian Federation 0.7400.82410.2 0.049
43  Romania 0.7300.82811.8 0.022
44  Argentina 0.7290.84513.7 0.063
45  Ukraine 0.7280.7796.4 0.035
46  Bulgaria 0.7210.81611.6 0.022
47  Georgia 0.7160.81211.8 0.093
48  Uruguay 0.7120.81712.7 0.055
49  Chile 0.7090.85116.7 0.058
50  Albania 0.7080.79510.9 0.058
51  Oman 0.7060.81313.2NA
52  Serbia 0.7050.80612.5 0.021

## Past top countries

The list below displays the top-ranked country from each year of the Human Development Index. Norway has been ranked the highest sixteen times, Canada eight times, and Japan and Iceland twice.

### In each original HDI

The year represents the time period from which the statistics for the index were derived. In parentheses is the year when the report was published.

• 2019 (2020):
• 2018 (2019):
• 2017 (2018):
• 2015 (2016):
• 2014 (2015):
• 2013 (2014):
• 2012 (2013):
• 2011 (2011):
• 2010 (2010):
• 2007 (2009):
• 2006 (2008):
• 2005 (2007):
• 2004 (2006):
• 2003 (2005):
• 2002 (2004):
• 2001 (2003):
• 2000 (2002):
• 1999 (2001):
• 1998 (2000):
• 1997 (1999):
• 1995 (1998):
• 1994 (1997):
• 1993 (1996):
• 1992 (1995):
•  ???? (1994):
•  ???? (1993):
• 1990 (1992):
• 1990 (1991):

## Geographical coverage

The HDI has extended its geographical coverage: David Hastings, of the United Nations Economic and Social Commission for Asia and the Pacific, published a report geographically extending the HDI to 230+ economies, whereas the UNDP HDI for 2009 enumerates 182 economies and coverage for the 2010 HDI dropped to 169 countries. [20] [21]

## Criticism

The Human Development Index has been criticized on a number of grounds, including alleged lack of consideration of technological development or contributions to the human civilization, focusing exclusively on national performance and ranking, lack of attention to development from a global perspective, measurement error of the underlying statistics, and on the UNDP's changes in formula which can lead to severe misclassification in the categorisation of "low", "medium", "high" or "very high" human development countries. [22]

### Sources of data error

Economists Hendrik Wolff, Howard Chong and Maximilian Auffhammer discuss the HDI from the perspective of data error in the underlying health, education and income statistics used to construct the HDI. They identified three sources of data error which are due to (i) data updating, (ii) formula revisions and (iii) thresholds to classify a country's development status and conclude that 11%, 21% and 34% of all countries can be interpreted as currently misclassified in the development bins due to the three sources of data error, respectively. The authors suggest that the United Nations should discontinue the practice of classifying countries into development bins because: the cut-off values seem arbitrary, can provide incentives for strategic behavior in reporting official statistics, and have the potential to misguide politicians, investors, charity donors and the public who use the HDI at large. [22]

In 2010, the UNDP reacted to the criticism and updated the thresholds to classify nations as low, medium, and high human development countries. In a comment to The Economist in early January 2011, the Human Development Report Office responded [23] to a 6 January 2011 article in the magazine [24] which discusses the Wolff et al. paper. The Human Development Report Office states that they undertook a systematic revision of the methods used for the calculation of the HDI, and that the new methodology directly addresses the critique by Wolff et al. in that it generates a system for continuously updating the human-development categories whenever formula or data revisions take place.

In 2013, Salvatore Monni and Alessandro Spaventa emphasized that in the debate of GDP versus HDI, it is often forgotten that these are both external indicators that prioritize different benchmarks upon which the quantification of societal welfare can be predicated. The larger question is whether it is possible to shift the focus of policy from a battle between competing paradigms to a mechanism for eliciting information on well-being directly from the population. [25]

1. Since 2013
2. Since 2012

## Related Research Articles

In mathematics, the geometric mean is a mean or average, which indicates the central tendency or typical value of a set of numbers by using the product of their values. The geometric mean is defined as the nth root of the product of n numbers, i.e., for a set of numbers x1, x2, ..., xn, the geometric mean is defined as

A per capita GDP of \$3,200 ranks Solomon Islands as a lesser developed nation. Over 75% of its labour force is engaged in subsistence farming and fishing.

A developed country is a sovereign state that has a high quality of life, developed economy and advanced technological infrastructure relative to other less industrialized nations. Most commonly, the criteria for evaluating the degree of economic development are gross domestic product (GDP), gross national product (GNP), the per capita income, level of industrialization, amount of widespread infrastructure and general standard of living. Which criteria are to be used and which countries can be classified as being developed are subjects of debate. A point of reference of 20,000 USD in 2021 USD nominal GDP per capita for the IMF is a good point of departure, it is a similar level of development to the United States in 1960. Some countries with lower nominal gdp per capita could be considered as developed given that their PPP gdp per capita is much higher to their nominal gdp per capita, therefore having a higher standard of living than would be considered if one only looks at nominal gdp.

The Human Poverty Index (HPI) was an indication of the poverty of community in a country, developed by the United Nations to complement the Human Development Index (HDI) and was first reported as part of the Human Deprivation Report in 1997. It was considered to better reflect the extent of deprivation in deprived countries compared to the HDI. In 2010, it was supplanted by the UN's Multidimensional Poverty Index.

The Human Development Report (HDR) is an annual report published by the Human Development Report Office of the United Nations Development Programme (UNDP).

Happy life expectancy (HLE) is calculated by multiplying life expectancy by a happiness index. The first uses life expectancy at birth. The happiness index is the average appreciation of life from the world databases of happiness.

The Gender Related Development Index (GDI) is an index designed to measure gender equality.

Human development is the process characterized by the variation of material conditions. These conditions influence the possibilities of satisfying needs and desires. They also explore and realize the physical and psychic, biological and cultural, individual and social potentials of each person. It is also the name of the science that seeks to understand how and why the people of all ages and circumstances change or remain the same over time. It involves studies of the human condition with its core being the capability approach. The inequality adjusted Human Development Index is used as a way of measuring actual progress in human development by the United Nations. It is an alternative approach to a single focus on economic growth, and focused more on social justice, as a way of understanding progress.

An Education index is a component of the Human Development Index published every year by the United Nations Development Programme. Alongside the GDP Index and Life Expectancy Index, it helps measure the educational attainment, GDP per capita and life expectancy of countries.

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The Gender Inequality Index (GII) is an index for measurement of gender disparity that was introduced in the 2010 Human Development Report 20th anniversary edition by the United Nations Development Programme (UNDP). According to the UNDP, this index is a composite measure to quantify the loss of achievement within a country due to gender inequality. It uses three dimensions to measure opportunity cost: reproductive health, empowerment, and labor market participation. The new index was introduced as an experimental measure to remedy the shortcomings of the previous indicators, the Gender Development Index (GDI) and the Gender Empowerment Measure (GEM), both of which were introduced in the 1995 Human Development Report.

Measures of gender equality or (in)equality are statistical tools employed to quantify the concept of gender equality.

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