You’ve seen countries ranked by HDI and wonder what is the human development index? It’s a UN score combining health, education and income to measure how well people live, not just how rich a country is.
The HDI is one of the yardsticks used across global development, so it helps to know what sits behind the number.
| Item | Value |
|---|---|
| Countries covered by the 2019 HDI | 189 countries |
| Rank gap, Croatia above Kuwait | 21 ranks |
| Precision of reported HDI values | Three decimal places |
| Income measure used | GNI per capita in 2017 PPP dollars |
| Countries with regression-estimated mean years of schooling | 10 countries |
These figures come from the UNDP Human Development Reports FAQ on the 2019 HDI, available at hdr.undp.org. Figures can change with each new edition, so check the source before you rely on them.
What the Human Development Index measures
The Human Development Index (HDI) was created to emphasize that expanding human choices should be the ultimate criteria for assessing development results. Economic growth is a means to that process but is not an end in itself.
So instead of ranking countries by money alone, the HDI looks at outcomes in three areas:
- Health: life expectancy at birth.
- Education: mean years of schooling and expected years of schooling.
- Living standards: gross national income (GNI) per capita.
Together these indicators feed a single composite index for each country. The Human Development Report Office (HDRO) publishes it alongside other composite indices.
If you want the wider picture of global targets, the guide to sustainable development goals explained is a useful companion read.
Why income alone does not tell the story
The HDI can be used to question national policy choices. It asks how two countries with the same level of GNI per capita can end up with different human development outcomes.
The UNDP’s own example compares Kuwait and Croatia. Kuwait has GNI per capita more than two times higher than Croatia, yet Croatia’s life expectancy at birth is three years longer. Expected years of schooling are one year longer and mean years of schooling four years longer in Croatia, so Croatia has the higher HDI value and ranks 21 places above Kuwait.
Contrasts like this can stimulate debate about government policy priorities. They show why a country’s wealth and its people’s wellbeing are related but not identical.
Where does the HDI data come from?
The HDRO works with UN agencies and the World Bank, which provide internationally standardized data, and with national statistical agencies. It does not take data directly from national statistical sources.
For the 2019 HDI, each indicator had its own source:
- Life expectancy at birth: the UN Population Division in the UN Department of Economic and Social Affairs.
- Mean years of schooling: UNESCO Institute for Statistics (UIS) educational attainment data, with Barro and Lee (2018) estimates and projections where UIS data were not available.
- Expected years of schooling: the UIS.
- GNI per capita (in 2017 PPP dollars): the World Bank and the International Monetary Fund.
Differences between national and international values of indicators exist for some countries. The HDRO says it advocates for better data quality at all levels and for closer collaboration between national statistical authorities and UN statistical entities.
Why are incomes counted in PPP dollars?
The HDI compares diverse countries with very different price levels, so income has to be converted into a common currency first. Unlike market exchange rates, PPP (purchasing power parity) rates take account of price differences between countries.
In theory, 1 PPP dollar has the same purchasing power in a country’s domestic economy as $1 has in the US economy. That is how GNI per capita reflects living standards comparably across countries.
The PPP data was revised for the 2019 HDI. The World Bank made a major revision of GNI and GDP data in PPP terms in May 2020, setting a new base year of 2017. New population data from the United Nations Population Division, released in June 2019, were also used as the denominator for per-capita indicators and averages, which affected GNI per capita and the education indicators.
How countries are included and when values are estimated
The HDRO tries to include as many UN Member States as possible. To qualify, a country needs recent, reliable and comparable data for all three dimensions of the index.
When only one indicator is missing, the HDRO estimates it using an alternative source or a cross-country regression model. The FAQ gives these 2019 examples:
- Mean years of schooling for Liechtenstein is based on neighbouring Austria.
- Mean years of schooling was estimated by regression for 10 countries, including Comoros, Djibouti and Syria.
- Expected years of schooling was estimated by regression for nine countries, including Bahamas, Fiji and Haiti.
Estimates like these are a reminder that an HDI value is only as good as the statistics behind it.
How to read HDI rankings
Rankings usually move only a little between successive years. With the exception of GNI per capita, the other indicators change very slowly year to year.
The HDRO reports only three decimal places, because the values are not significant beyond that. Ties in the three-decimal values often show up as ties in rank.
Do not compare estimates across different editions of the report. Values and ranks published in different editions combine data revisions, methodology changes and real change in achievements. The HDRO advises using the consistent series in Table 2 of the latest report, which also shows rank changes between 2014 and 2019.
Rankings like these feed debate about policy priorities, and a separate explainer on how does foreign aid work covers one way outside money enters development discussions.
Frequently asked questions
What does the Human Development Index tell us?
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It tells you how countries perform on health, education and living standards, treating economic growth as a means rather than an end. It can also show how countries with similar incomes end up with different human development outcomes.
How many countries does the 2019 HDI cover?
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The 2019 HDI covers 189 countries. A country is included only if recent, reliable and comparable data exist for all three dimensions.
Can I compare HDI values from different report editions?
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The HDRO advises against it. Differences between editions mix data revisions, methodology changes and real change, so use the consistent data in Table 2 of the latest report.
Why do some countries share the same HDI rank?
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HDI values are reported to three decimals, and many countries have identical values at that precision. Those ties carry over into their ranks.
