human poverty and development index
Composite measures of economic development The Human Development Report has been published by the United Nations each year since 1990. The report contains detailed statistical information on economic and social development indicators for virtually every country in the world. Among the hundreds of tables and charts we find the annual data on the Human Development Index and the Human Poverty Index.
Both are simple composite measures of the extent to which living standards vary across countries.
The Human Development Index (HDI) is an alternative measure of a country's economic standard of living that has been developed under the United Nations Development Programme.
The HDI is constructed as an aggregate index of three components: education, income, and life expectancy at birth and scaled to lie within a 0 to 1 interval.
The focus of the HDI is on the escape from poverty - defined as an HDI below 0.5. Zambia for example is a country that has seen its HDI value fall during the 1990s. In contrast, China is making substantial progress using these basic criteria for human development.
According to the International Monetary Fund-"Human development is regarded as a process of expanding people's choices; income is assumed to impact on this primarily at low levels of material well-being and, above a threshold level, is considered to make a sharply diminishing contribution, the increments eventually approaching zero"
Long-run HDI estimates offer a different angle on divergence between high- and low-income countries from that which emerges from focusing solely on GDP per capita data.
Human Poverty Index (HPI)
HPI data seeks to provide a "multidimensional measure of poverty". It focuses on four basic dimensions of human life - longevity; knowledge. economic provisioning and social inclusion.
The criteria used differ between developing and developed countries. For example in EDLC's, one measure is the % of people not expected to survive to age 40. For industrialised economies, the index includes the % of people not expected to survive to age 60.
HPI-1 includes 92 developing countries. HPI-2 contains 17 industrialised nations. All nations included in the HPI-2 index have achieved a high level of human development. They all score at least 0.894 on the Human Development Index.
The UK performs poorly using the criteria included in the Human Poverty Index. Only the USA and Ireland were given a lower ranking. Notable for the UK is the high rate of adult functional illiteracy and the second highest degree of income inequality. By contrast, Scandinavian countries fill 3 of the top 6 positions. Income inequality is on a lower scale - not least because of a more generous system of income replacement for those in receipt of state welfare benefits.
Note that the data used to calculate the composite index refers back to 1997 or earlier. In the last three years the New Deal and Welfare to Work Programmes have attempted to reduce long-term unemployment. The Labour government is also committed to alleviating some of the worst extremes of income poverty and inequality through the introduction of the Minimum Wage and new tax credits and minimum income guarantees for low-income households. It will take years for these strategies to have a substantial impact on the Human Poverty Index
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