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What is the Human Development Index? What are the Challenges of the HDI?

By Christopher Smith
Sep 12, 2025
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This article is about what is the human development index. The Human Development Index (HDI) is a composite statistical measure used to assess and compare the development levels of countries around the world.

What is the Human Development Index?

The Human Development Index (HDI) is a tool that measures and compares the level of human development across countries. It was introduced by the United Nations Development Programme (UNDP) in 1990 as an alternative to conventional measures of national development, such as income per capita or economic growth.

The HDI is based on three key dimensions of human development: a long and healthy life, access to education, and a decent standard of living. Each dimension is measured by a specific indicator:

- A long and healthy life is measured by life expectancy at birth, which reflects the overall health and well-being of a population.

- Access to education is measured by two indicators: mean years of schooling for adults aged 25 years and more, which reflects the accumulated human capital of a population; and expected years of schooling for children of school-entering age, which reflects the educational opportunities available for the next generation.

- A decent standard of living is measured by gross national income (GNI) per capita adjusted for the price level of the country, which reflects the average income and purchasing power of a population.

How is the HDI Calculated?

The HDI is calculated as the geometric mean of the normalized scores for each of the three dimensions. The scores range from 0 to 1. with higher values indicating higher levels of human development. The HDI can be used to compare the performance and progress of different countries, as well as to identify the main challenges and opportunities for human development.

The HDI is not a comprehensive measure of human development, as it does not capture other aspects such as inequality, poverty, human security, empowerment, etc. The UNDP also publishes other composite indices that address some of these issues, such as the Inequality-adjusted HDI, the Gender Development Index, and the Multidimensional Poverty Index.

The HDI is updated annually and published in the Human Development Report, along with detailed data and analysis on various aspects of human development. The latest report was released in December 2020 and covers 189 countries and territories. According to the report, the top five countries in terms of HDI in 2019 were Norway, Ireland, Switzerland, Hong Kong (China), and Iceland. The bottom five countries were Niger, Central African Republic, Chad, South Sudan, and Burundi.

What are the Challenges of the HDI?

The HDI has been widely used and cited as a reference for policy making, research, advocacy, and public awareness on human development issues. It has also been subject to criticism and debate on its methodology, limitations, and implications. Some of the main challenges and controversies include:

- How to measure and compare human development across different contexts and cultures, especially when data are scarce or unreliable.

- How to account for the trade-offs and synergies among the different dimensions and indicators of human development, as well as their distribution within and across countries.

- How to incorporate other dimensions and indicators that are relevant for human development but not included in the HDI, such as environmental sustainability, political participation, human rights, etc.

- How to interpret and communicate the HDI results and rankings in a meaningful and responsible way, avoiding oversimplification or misuse.

Despite these challenges, the HDI remains a valuable and influential tool for measuring and comparing human development across countries.

Bottom Line

In this article, we have discussed what is the human development index.  It also serves as a reminder that human development is not only about economic growth or income, but also about expanding people's choices and capabilities to live a life they value.

Disclaimer: The information on this page may have been obtained from third parties and does not necessarily reflect the views or opinions of BitKan. This content is provided for general informational purposes only, without any representation or warranty of any kind, nor shall it be construed as financial or investment advice. BitKan shall not be liable for any errors or omissions, or for any outcomes resulting from the use of this information. Investments in digital assets can be risky. Please carefully evaluate the risks of a product and your risk tolerance based on your own financial circumstances. Products mentioned in this article may not be available in your region.

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