[BABA3/1ST.] ECON501: Human Development Index

Human Development Index (HDI)

A socio-economic measure built on three pillars of human welfare:

• Longevity — Life expectancy

• Knowledge — Education and literacy

• Living standards — GDP per capita

Human Development Index (HDI)

• It is a tool used to measure a country's overall achievement in its social and economic dimensions.

• The human development index is a measure of economic development and economic welfare.

Human development

It regards economic growth as essential but emphasizes the need to pay attention to its quality and distribution, analyses at length its link with human lives and questions its long-term sustainability.

Aspects of development

• The quality of life people enjoy in a country

• The opportunities people have

• Freedoms people enjoy

Dr. Mahbub-ul-haq

• A Pakistani economist that introduced the concept of human development.

• He has described human development as development that enlarges people’s choices and improves their lives.

1990

When was human development devised and launched?

Amartya Sen and Mahbub-ul-haq

They worked upon the capabilities and functioning which provided conceptual framework and was later published by United Nations Development Programme (UNDP).

• Equality

• Sustainability

• Productivity

• Empowerment

Four essential pillars of human development

• Life expectancy at birth

• Expected years of schooling

• Average years of schooling

• Gross national income (GNI)

Four key metrics of HDI

Life expectancy at birth

To assess a long and healthy life

Expected years of schooling

To assess access to knowledge of the young generation

Average years of schooling

To assess access to knowledge of the older generation

Gross national income (GNI)

To assess the standard of living

Between 0 to 1

HDI is placed between…

HDI of 1

Highest level of economic development

HDI of 0

Lowest level of economic development

HDI is above 0.808

• Very high

• 49 countries

HDI is between 0.700 to 0.807

• High

• 53 countries

HDI is between 0.556 to 0.699

• Medium

• 42 countries

HDI is below 0.555

• Low

• 43 countries

Health

• The indicator chosen to assess health is the life expectancy at birth.

• A higher life expectancy means that people have a greater chance of living longer and healthier lives.

Education

• The adult literacy rate and the gross enrollment ratio represent access to knowledge.

• The number of adults who are able to read and write and the number of children enrolled in schools show how easy or difficult it is to access knowledge in a particular country.

Income or Access to Resources

GDP, GNP and other measures of income per capita and over all output of the economy.

HDI = (LI*EI*II)^1/3

Formula for HDI

Top 10 countries with the highest HDI

Lowest 10 countries with low HDI