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 MaterialEducationHealthPoliticalSocial Deprivation Multidimensional Poverty Index Average Level Human Development Index Empowerment indicators Vulnerability Indicators 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. 4

Distribution of years of schooling Example: Montenegro, Source: MICS Disposable Income, simulated Distributions of HDI dimensions

Expected length of life, from life tables 6 Life expectancyAtkinson measure(ε=1) Japan Burundi Cameroon South Africa Mongolia Pakistan Russian Federation

Inequality-adjusted HDI Needs for distributional data at the level of household or individual Variables relevant to three dimension: Household consumption or income per capita Mean years of schooling Expected length of life Source of data: Nationally representative household surveys UN Life tables 7

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) 8

Inequality adjusted HDI 9

Inequality-adjusted HDI 10

Inequality-adjusted HDI 11

Inequality-adjusted HDI 12 Example: Slovenia Indicator Dimension index Inequality measure (A1) Inequality-adjusted index Life expectancy (1–0.043) ∙ = Mean years of schooling Expected years of schooling Education index (1–0.040) ∙ = Logarithm of GNI GNI25, (1–0.122) ∙ = HDI0.828 IHDI  0.932=0.772 Loss /0.822=0.068

Inequality-adjusted HDI 13 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 14 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 15

Inequality adjusted HDI 16