Human Development Index (HDI)
The Three Pillars of HDI
The HDI is like a three-legged stool. If one leg is weak, the whole stool wobbles. Each leg measures a different part of human progress.
This is measured by life expectancy at birth. It tells us the average number of years a newborn baby can expect to live. For example, in Japan, people live a very long time (around 85 years), while in some other countries, it might be much lower due to disease or lack of healthcare.
Education is measured by two parts: the average number of years adults spent in school, and the expected years of schooling for a child starting school. A country with good schools and high attendance, like South Korea, scores very high on this pillar.
This is measured by income, but not just any income. It uses Gross National Income (GNI) per capita, adjusted for the cost of living in different countries (called Purchasing Power Parity, or PPP). This lets us compare what people can actually buy with their money in different places.
$HDI = \sqrt[3]{I_{Health} \times I_{Education} \times I_{Income}}$
How HDI Helps Us: Comparing Real Countries
Let's look at a few countries to see how the HDI works in practice. The table below shows data from a recent report. Notice how a high income alone doesn't always mean the highest HDI if health and education are lower.
| Country | Life Expectancy (years) | Expected Schooling (years) | GNI per capita (PPP $) | HDI Value |
|---|---|---|---|---|
| Switzerland | 84.3 | 16.5 | 71,000 | 0.962 |
| Norway | 83.3 | 18.1 | 64,000 | 0.961 |
| USA | 78.9 | 16.3 | 64,000 | 0.921 |
| Brazil | 75.5 | 15.4 | 14,800 | 0.754 |
Important Questions About HDI
The HDI is a number between 0 and 1. Countries closer to 1.0 are considered to have very high human development. No country has ever reached exactly 1.0, but countries like Switzerland and Norway often score above 0.95.
It's possible, but rare. A country could be rich (high income) but if many people cannot read (low education) or if life expectancy is short (poor health), its HDI will be pulled down. The HDI shows that wealth alone doesn't guarantee a good life for everyone.
GDP [1] tells us the total value of goods and services a country produces. It's like knowing how much fuel a car has. The HDI tells us if the car is actually taking people to school and the hospital. It's a broader measure of actual human well-being.
What We Have Learned
Footnote
- [1] GDP (Gross Domestic Product): The total monetary value of all finished goods and services produced within a country's borders in a specific time period.
- [2] GNI (Gross National Income): The total income earned by a country's residents and businesses, including any income from abroad.
- [3] PPP (Purchasing Power Parity): An economic theory that adjusts exchange rates so that a basket of goods costs the same in different countries, allowing for a more accurate comparison of living standards.