Human Development Index (HDI)

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Max Roser (2018) - "Human Development Index (HDI)". Published online at OurWorldInData.org. Retrieved from: 'https://ourworldindata.org/human-development-index' [Online Resource]

The Human Development Index (HDI) is a composite statistic (index) that measures key dimensions of human development:

a long and healthy life (here is the Our World in Data entry on Life Expectancy)

being knowledgeable (here are the Our World in Data entries on Literacy and the Global Rise of Education)

and have a decent standard of living (here is the Our World in Data entry on Economic Growth).

This entry provides a basic overview of the Human Development Index (HDI) over the last few decades using the standard HDI methodology of the UNDP, as well as the long-term Historical Index of Human Development (HIHD), developed by Leandro Prados de la Escosura. The metrics of the HDI and HIHD are similar, but differ slightly in how they are used to derive the development index [further information on these measures can be found in our Data Quality & Definitions section].

I. Empirical View

I.1 The very long run perspective on human development through the HIHD

The economic historian Leandro Prados de la Escosura calculated the HDI over the course of 2 centuries, here termed the 'Historical Index of Human Development'. This data is shown below to give a long run perspective on human development.

I.2 Country by country perspective over the last 3 decades

The HDI is published by the United Nations Development Programme and this data is shown in the time-series chart below. Add other countries to see the change over time.

I.3 World map of the HDI

The HDI data published by the United Nations Development Programme is shown in this map – move the slider below the chart to see the change over time.

I.4 Human Development Index (HIHD) and GDP

HIHD with and without GDP

The Human Index of Human Development (HIHD) provides a composite measure of development using metrics of life expectancy, literacy, educational enrolment and gross domestic product (GDP) per capita.

The chart below shows the comparison of the HIHD with and without the inclusion of the GDP per capita metric. Countries which lie below or closer to the grey line (which indicates equal parity between these measures), have achieved improvements in these measures of development (health and education) with lower levels of GDP per capita relative to countries further from the line. Overall, there is a strong correlation between the HDI measured with and without GDP per capita as an additional metric.

HIHD vs. GDP per capita

The chart below shows the Historical Index of Human Development (HIHD) plotted relative to average income (GDP per capita).

HIHD (without GDP metric) vs. GDP per capita

The chart below shows the Historical Index of Human Development (HIHD), renormalised without the GDP metric, plotted relative to average income (GDP per capita).

II. Data Quality & Definition

II.1 How is the HDI measured?

The Human Development Index (HDI) provides a single index measure which aims to capture three key dimensions of human development: a long and healthy life, access to knowledge and a decent standard of living.

The HDI utilises four key metrics1:

  • life expectancy at birth (to assess a long and healthy life);
  • expected years of schooling (to assess access to knowledge);
  • average years of schooling (to assess access to knowledge);
  • gross national income (GNI) per capita (to assess standard of living).

There are two steps to calculating the HDI:

1. Forming indices for each of the four metrics.

Values of each of the four metrics must be normalised to an index value of 0 to 1. To do this, "goalposts" of the maximum and minimum limits on each metrics are set by the UNDP, as shown in the table below.

With the actual value for a given country, and the global maximum and minimum, the dimension (indices) value for each can be calculated as:

2. Aggregating the four metrics to produce the HDI.

Once each of the individual indices have been calculated, they are aggregated to calculate the HDI.

The HDI is calculated as the geometric mean (equally-weighted) of life expectancy, education, and GNI per capita, as shown here:

II.2 How is the HIHD measured?

The Historical Index of Human Development (HIHD) was created by Leandro Prados de la Escosura, and provides a measure of human development from 1870 onwards.

The HIHD is based on a very similar premise to that of the HDI. It provides an indexed measure across the same three dimensions: a long and healthy life, access to knowledge and a decent standard of living.

The four indices used in calculation of the HIHD differ slightly from that of the HDI. They are:

  • life expectancy at birth (to assess a long and healthy life);
  • adult literacy (percentage of the population aged over 15 years who can read and write);
  • educational enrolment rates (percentage of population in the relevant age cohort enrolled in primary, secondary, and tertiary education);
  • gross domestic product (GDP) per capita (to assess standard of living).

To convert these metrics into indices between 0 and 1, the HIHD uses a different methodology from that of the HDI. Whereas the HDI scales these linearly using the actual values, and maximum and minimum bounds, the HIHD scales these non-linearly. The authors note: "As social variables (longevity and education) have upper and lower bounds (unlike GDP per head that has not known upper bound), they are transformed nonlinearly in order to allow for two main facts: that increases of the same absolute size represent greater achievements the higher the level at which they take place; and that quality improvements are associated to increases in quantity." These variables are therefore scaled logarithmically, as shown:

Where: I is the dimension index, x is an indicator of a country’s standard of living, M and Mo are the maximum and minimum values, respectively, or goalposts, that facilitate comparisons over time and log stands for the natural logarithm. The index for each dimension ranges between 0 and 1.

Notice that this is a very different transformation than the HDI (as measured by the UNDP) which uses, I = (x - Mo) / (M - Mo).

The four indices are then combined to form the HIHD value using the geometric average:

II.3 Comparison of HDI and HIHD

In the chart below we see a comparison of the Human Development Index (HDI) and Historical Index of Human Development (HIHD), as described in the explanations above. Since all countries lie above the grey (parity) line, we see that countries tend to score higher on the HDI than the HIHD. However, if we look at changes through time, we see that although HIHD values are typically lower, they can change much more quickly since indices are derived non-linearly (on a logarithmic scaling).2

III. Data Sources

United Nations Development Programme
      • Data: The United Nations Development Programme is the institution that publishes the Human Development Index.
      • Geographical coverage: Globally - by country, world region, and HDI level

      • Time span: From 1980 onwards

      • Available at: United Nations Development Programme data page

Leandro Prados de la Escosura