HUMAN DEVELOPMENT INDEX (HDI) & HUMAN POVERTY INDEX : What is the human development index (HDI)? The HDI—human development index—is a summary composite index that measures a country's average achievements in three basic aspects of human development: longevity, knowledge, and a decent standard of living. Longevity is measured by life expectancy at birth; knowledge is measured by a combination of the adult literacy rate and the combined primary, secondary, and tertiary gross enrolment ratio; and standard of living by GDP per capita (PPP US$). For details on how to calculate the HDI. What is the gender-related development index (GDI)? The GDI—gender-related development index—is a composite indicator that measures the average achievement of a population in the same dimensions as the HDI while adjusting for gender inequalities in the level of achievement in the three basic aspects of human development. It uses the same variables as the HDI, disaggregated by gender. For details on how to calculate the GDI. What is the gender empowerment measure (GEM)? The GEM— gender empowerment measure—is a composite indicator that captures gender inequality in three key areas: • political participation and decision-making, as measured by women’s and men’s percentage shares of parliamentary seats; • economic participation and decision-making power, as measured by two indicators—women’s and men’s percentage shares of positions as legislators, senior officials and managers and women’s and men’s percentage shares of professional and technical positions; • power over economic resources, as measured by women’s and men’s estimated earned income (PPP US$). How are the GDI and the GEM used? To draw attention to gender issues. The GDI adjusts the HDI for inequalities in the achievement of men and women. A comparison of a country’s ranking on the HDI and its ranking on the GDI can indicate the existence of gender discrepancy. To illustrate that gender empowerment does not depend on income, it is useful to compare relative rankings on the GEM and the relative level of national income. For example, • Poland ranks 25th in the GEM, ahead of Japan, in 44th place, yet income per person in Poland is about one third that of Japan's (9,450 PPP US$ vs. 25,130 PPP US$ for 2001). • The UK and Finland have very similar income per person (24,160 PPP US$ and 24,430 PPP US$ for 2001) yet in the GEM Finland ranks 5th, the UK 17th. Both indicators can be disaggregated to highlight gender inequality within countries, which can vary widely across regions. What is the human poverty index (HPI-1 and HPI-2)? Poverty has traditionally been measured as a lack of income—but this is far too narrow a definition. Human poverty is a concept that captures the many dimensions of poverty that exist in both poor and rich countries—it is the denial of choices and opportunities for living a life one has reason to value. The HPI-1—human poverty index for developing countries—measures human deprivations in the same three aspects of human development as the HDI (longevity, knowledge and a decent standard of living). HPI-2— human poverty index for selected high-income OECD countries—includes, in addition to the three dimensions in HPI-1, social exclusion. For HPI-1 (developing countries): deprivations in longevity are measured by the probability at birth of not surviving to age 40; deprivations in knowledge are measured by the percentage of adults who are illiterate; deprivations in a decent standard of living are measured by two variables: the percentage of people not having sustainable access to an improved water source and the percentage of children below the age of five who are underweight. For HPI-2 (selected high-income OECD countries): deprivations in longevity are measured by the probability at birth of not surviving to age 60; deprivations in knowledge are measured by the percentage of adults lacking functional literacy skills; deprivations in a decent standard of living are measured by the percentage of people living below the income poverty line, set at 50% of the adjusted median household disposable income; and social exclusion is measured by the rate of long-term (12 months or more) unemployment of the labor force. For details on how to calculate the HPI-1 and HPI-2 How is the HPI used? • To focus attention on the most deprived people and deprivations in basic human capabilities in a country, not on average national achievement. The human poverty indices focus directly on the number of people living in deprivation—presenting a very different picture from average national achievement. It also moves the focus of poverty debates away from concern about income poverty alone. • To highlight the presence of human poverty in both the rich and poor countries. High income per person is no guarantee of a poverty-free country. Even among the richest countries, there is human poverty. The HPI-2 for selected high-income OECD countries (HPI-2) shows that out of 17 European and North American countries, the U.S. has the second highest level of income per person, but also the highest rate of human poverty. • To guide national planning for poverty alleviation. Many National Human Development Reports now break down the HPI by region or other socioeconomic groups to identify the areas or social groups within the country most deprived in terms of human poverty. The results can be dramatic, creating national debate and helping to reshape policies.

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