What is Human Development Index ?

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The Human Development Index (HDI) is a statistic developed and compiled by the United Nations since 1990 to measure various countries’ levels of social and economic development. It is composed of four principal areas of interest: mean years of schooling, expected years of schooling, life expectancy at birth, and gross national income (GNI) per capita.This index is a tool used to follow changes in development levels over time and compare the development levels of different countries.

Definition

The Human Development Index (HDI) is a statistical measure developed by the United Nations Development Programme since 1990 to assess the social and economic development levels of countries. HDI considers four main areas: average years of schooling, expected years of schooling, life expectancy at birth, and gross national income (GNI) per capita.

Origin

The concept of the Human Development Index was first introduced in 1990 by Pakistani economist Mahbub ul Haq and Indian economist Amartya Sen, aiming to provide a more comprehensive measure of national development beyond mere economic growth data.

Categories and Features

HDI is primarily divided into three categories: high human development, medium human development, and low human development. Countries with high human development typically excel in education, health, and income, while those with low human development face challenges in these areas. The advantage of HDI lies in its comprehensiveness, though it has been criticized for potentially overlooking other important social factors.

Case Studies

Norway has consistently ranked high in HDI due to its excellent levels of education, health, and economic development. Conversely, Niger often ranks low in HDI, reflecting its challenges in education and health sectors. These cases illustrate how HDI reflects the development status of different countries.

Common Issues

Investors might misunderstand HDI as merely an economic indicator, overlooking its measurement of social development. Another common issue is that HDI does not fully capture internal inequalities within a country.

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