The Human Development Index

How the United Nations ranks countries by health, education and income together, and what that combined score reveals that income alone does not.

For decades, countries were compared mainly by income per person. The Human Development Index, or HDI, was created to challenge that habit. Published by the United Nations Development Programme since 1990, it combines three things into a single score between 0 and 1: how long people live, how much education they get, and how much income they have. The idea, championed by Pakistani economist Mahbub ul Haq working alongside Amartya Sen, was that development is about expanding people’s lives, not just expanding the economy.

The three dimensions

The first dimension is a long and healthy life, measured by life expectancy at birth, meaning how many years a newborn could expect to live if current death rates held steady.

The second is knowledge. It uses two measures: mean years of schooling, how long adults aged 25 and over have actually spent in school, and expected years of schooling, how long a child starting school today can expect to stay if current enrollment patterns continue. Together they capture both the past and the future of a country’s education.

The third is a decent standard of living, measured by gross national income per capita, adjusted for purchasing power parity. Income enters the formula in logarithm form, which is a mathematical way of saying that each extra dollar counts for less as a country gets richer. Going from 1,000 to 2,000 dollars per person transforms lives; going from 60,000 to 61,000 dollars barely changes them.

How the score is built

Each dimension is turned into an index from 0 to 1 by comparing the country’s value with a fixed minimum and maximum. For example, life expectancy is scored against a range of 20 to 85 years. The three dimension scores are then combined using a geometric mean, a kind of average that multiplies rather than adds. This matters: a country cannot fully make up for very poor health with very high income, because a weak score in any one dimension drags the whole index down.

Countries are grouped into four bands: very high, high, medium and low human development. Nations such as Switzerland and Norway usually sit near the top, while several countries in the Sahel region of Africa sit near the bottom.

When income rank and HDI rank disagree

Compare two hypothetical countries with the same income per person, about 15,000 dollars a year. In the first, oil revenue flows mostly to a small elite, many children leave school early and life expectancy is around 66 years. In the second, the government has invested heavily in clinics and schools, so life expectancy is around 78 years and children expect about 15 years of education. Their income scores are identical, but the second country's HDI will be noticeably higher. Real-world gaps like this, where a country ranks much better or worse on the HDI than its income alone would predict, are among the most revealing parts of the annual report.

Strengths and criticisms

The HDI’s great strength is its simplicity. It shifted public debate by showing that growth in income does not automatically translate into longer lives or better schooling, and that some fairly poor places, such as the Indian state of Kerala, achieved strong health and education outcomes early.

Critics point out that the choice of three dimensions and the way they are weighted are somewhat arbitrary. The index also ignores inequality within a country, environmental damage, political freedom and personal safety. In response, the UNDP added companion measures, including the inequality-adjusted HDI, which lowers a country’s score when health, education and income are unevenly shared, and a planetary pressures-adjusted version that accounts for carbon emissions and material use.

Treating the HDI as a measure of happiness or overall wellbeing

The HDI measures only three specific capabilities: health, education and income. It says nothing directly about happiness, human rights, safety or the environment. A high score is strong evidence that people have access to certain basics, but it is not a complete verdict on how good life is in a country.

Key takeaways

The Human Development Index, launched in 1990, combines health, education and income into one score from 0 to 1.
Income is counted in logarithm form, so extra income matters less as countries grow richer.
A geometric mean means weakness in one dimension cannot be fully offset by strength in another.
Countries can rank very differently on the HDI than on income alone, revealing policy choices.
Companion indexes adjust the HDI for inequality and environmental pressure.