What is the Human Development Index?

By Ion Ilasco

What is the Human Development Index?

The Human Development Index (HDI) helps governments to understand where they stand with regard to improving the lives of the population. It was created to emphasize the importance of social capital and act as an assessment criterion for countries in relation to their socio-economic development. The index focuses on three life dimensions, specifically health, knowledge, and standard of living. For the second year in a row, Norway tops the HDI index. This article provides a general overview of HDI and highlights the top five countries with the highest levels of human development.

What is the HDI?

The HDI is a statistical index devised by the United Nations (UN) that is used to measure the level of socio-economic development of 189 countries. It focuses on measuring the average achievements on three dimensions of human development, health, education, and standard of living. Using the HDI, the UN emphasizes that people and their capabilities are a method of assessing a country’s progress rather than focusing solely on economic growth, as two countries with a similar Gross National Income (GNI) per capita can have different outcomes in terms of human development. Furthermore, the contrasting results of HDI for countries that have similar economic potential should act as a catalyst for policymakers to initiate discussions and reassess current policies.

What does the Human Development Index consist of?

The Human Development Index is composed of three dimensions, four indicators, and three indexes. The numbers for each indicator are normalized to fit a scale between 0 and 1. The overall value of HDI will emerge as the geometric mean of the three indexes corresponding to each dimension of life. These are the three dimensions used to determine the HDI:

  • A long and healthy life, as measured by life expectancy at birth
  • Education or knowledge, as measured by mean years of schooling and expected years of schooling
  • A decent standard of living, as measured by GNI per capita in US$

Fig.1. Dimensions, indicators, and indexes that make up the HDI

Source: UNDP – Human development reports: Human Development Index (HDI).

The minimum and maximum values for the HDI range between 0 and 1, therefore the higher the HDI value, the higher the level of a country’s human development. Moreover, the index is built around four benchmarks which groups countries as having:

  • Very high human development (0.800 – 1)
  • High human development (0.700 – 0.799)
  • Medium human development (0.550 – 0.699)
  • Low human development (0 – 0.549)

The 2020 HDI report, which presents the country rankings for 2019, mentions 33 countries with low human development, 37 with medium human development, 53 having high human development, and 66 countries that have very high human development.

Top 5 countries with the highest levels of human development

Norway – for the second year in a row Norway tops the HDI rankings with an overall value of 0.957. The average anticipated life expectancy at birth for this country is 82.4 years while the GNI per capita is US $66,494

Ireland – is second in the HDI rankings with a value of 0.955 having gained one position compared to 2018. Ireland scored high on the GNI per capita ($68,371) and on the expected years of schooling index (18.7 years)

Switzerland – shares second place with Ireland scoring a similar 0.955. Nonetheless, while it scored more on GNI per capita ($69,394) it scored less than Ireland on the expected years of schooling index (16.3)

Hong Kong – comes in fourth with an HDI score of 0.949 similar to its 2018 ranking. The region has an average life expectancy of 84.9 and a GNI per capita of $62,985

Iceland – shares fourth place with Hong Kong. It scored slightly less on GNI per capita ($54,682) and on the average life expectancy (83).

The full list of 2020 HDI country ranking can be viewed here.

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