New Human Development Measures

DOHA, 9-11 May, 2011

HDR 2010

HDR 2010 Measures• The main composite measures:

- Revised HDI- Inequality-adjusted HDI - Multi-dimensional poverty index (replaces HPI)- Gender inequality index (replaces GDI and GEM)

HDR 2010 Human Development Measures

Empirical measure

Components of Human Development

Material Education Health Political Social

Deprivation Multidimensional Poverty Index

Average Level Human Development IndexEmpowerment

indicators

VulnerabilityIndicators of human security, sustainability, environment, well-being, decent work, etc.

Inequality

Inequality-adjusted HDI

Gender Inequality Index

Inequality-adjusted HDI

The country-average HDI conceals wide disparities in distribution of HD across population within a country

•False impression: Equal distribution of HD within the country

•Inequality in dimensions of HDI •Inequality in concentration of income and other forms of material wealth •Inequality in distribution of other characteristics (e.g., years of education) is often recognized but rarely measured.

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Distribution of years of schoolingExample: Montenegro, Source: MICS 2006

5

3.298

.3566.731.4635

7.221

.2496.2853.1605

14.98

.39221.07

16.38

36.64

.6062

6.971

1.141

8.772

.2139.0713

01

02

03

04

0P

erc

ent

0 5 10 15 20ys

Montenegro

Disposable Income, simulated

Distributions of HDI dimensions

Expected length of life, from life tables

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Life expectancy Atkinson measure(ε=1)

Japan 83.2 0.039Burundi 51.4 0.478Cameroon 51.7 0.444South Africa 52.0 0.302Mongolia 67.3 0.226Pakistan 67.2 0.329Russian Federation 67.2 0.115

Inequality-adjusted HDI

• Needs for distributional data at the level of household or individual

• Variables relevant to three dimension:Household consumption or income per capitaMean years of schoolingExpected length of life

• Source of data:Nationally representative household surveysUN Life tables

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Inequality-adjusted HDI

Distributional data on life expectancy:• Abridged Life Tables from UN Population Division based on

mortality data and on survival models

Household survey data on income and education:• World Bank: International Income Distribution Database

(LSMS and similar household surveys)• EU-SILC (on income and living conditions for EU member

states)• LIS (for OECD and other countries)• MICS, DHS (for education)

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Inequality adjusted HDI

9

Inequality-adjusted HDI

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Inequality-adjusted HDI

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Inequality-adjusted HDI

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Example: Slovenia Indicator Dimension

indexInequality

measure (A1)Inequality-adjusted

indexLife expectancy 78.8 0.930 0.043 (1–0.043) 0.930 = ∙

0.890Mean years of schooling

9 0.682 0.040

Expected years of schooling

16.7 0.811

Education index 0.782 0.040 (1–0.040) 0.782 = ∙0.751

Logarithm of GNI 10.16 0.780 GNI 25,857 0.238 0.122 (1–0.122) 0.238 = ∙

0.209HDI 0.828IHDI 0.8280.932=0.772Loss 1-0.772/0.822=0.068

Inequality-adjusted HDI

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Policy relevance:

• Allows a direct link to inequalities in dimensions

• Inform policies towards inequality reduction

• Evaluation tool for various policy options aimed at inequality reduction

• Leads to better understanding of inequalities across population and their contribution to the overall loss of development

Inequality-adjusted HDI

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Limitations:

• IHDI is not association sensitive – does not account for multiple deprivation

• Negative and zero values are adjusted

• Limited international comparability since data refer to different time points

Inequality-adjusted HDI

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Loss (%)

NA(0,11.5](11.5,28.0](28.0,45.5]

Inequality adjusted HDI

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0 10 20 30 40 50Loss due to inequality (%)

Developed

CE Europe and CIS

LA and Caribbean

E. Asia and Pacific

South Asia

Arab States

Sub-Saharan Africa

HDI Health Education Income