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List of reference links
1. URL: http://www.imf.org/external/ - International Monetary Found.
2. URL: http://www.gks.ru/ - Statistics State Committee of Russia.
3. URL: http://www.internationalliving.com/ - International Living.
УДК 330.146; 330.5.051
HUMAN DEVELOPMENT INDEX AND ITS OPPOSITION
O. В. Сальникова
В статье приведена система показателей, отражающих накопление человеческого капитала в современном обществе. Индекс развития человеческого потенциала противопоставляется Индексу развития человеческого потенциала, скорректированному с учетом неравенства, Индексу гендерного неравенства и Многомерному индексу бедности.
Indicator system, describes human capital accumulation in modern society, is gives in the article. Human development index is opposed to Inequality-adjusted human development index, Gender inequality index, Multidimensional poverty index.
Human development index as method of measurement of human development has been entered by United Nations Development Program (UNDP) in 1990 in Human development repor. Unlike previous theories, concept of human development is focused on the person and proclaims well-being of person as basic and unique purpose of development.
This system was created after numerous criticisms, such as HDI's education measure was especially bogus, because 2/3rds of the weight came from the literacy rate, but the other 1/3 came from the Gross Enrollment Index - the fraction of the population enrolled in primary, secondary, or tertiary education (to max out education score, you have to turn 100 % of population into students). Also this index underestimated the role of GDP per capita, which has grown fantastically during the last two centuries and there's plenty of room left for further improvement even in rich countries [1].
In 2010 Human Development Report, the UNDP began using a new method of calculating the HDI. The estimation of life quality with HDI is based on minimum set of indicators, which quantitatively represents one of basic directions of human development: longevity, education and standard of living (picture 1) [2].
Human Development Index (HDI) Picture 1. HDI system
HDI is as division criterion of the countries on groups with various level of human development. Without dependence from level of economic development, countries with high level of human development is there HDI > 0,8; countries with average level of human development - 0,5 < HDI < 0,8; countries with low level of human development - HDI < 0,5. Comparison of indexes of longevity, education and standard of living gives the chance to specify, with other things being equal, a priority of corresponding programs of human development. Indexes of measurements of human development can be used for definition of desirable scales of financing of human development programs at national and regional levels. The HDI components are presented in the table 1 and HDI dynamics is shown in table 2 [2].
Russia has an index 0,755 and it has got to the end of the group with high level of human development, having appeared in one group with such countries as Libya, Grenada, Belarus, Kazakhstan. From the developed countries Russia is separated with low life expectancy.
HDI value constantly grow in most countries in the world, but HDI rank of most presented counties is not changed very much during 5 last years and in Russian Federation too. The exceptions are Netherlands - 5 point growth (because of high economic growth rate), Kuwait - 8 point decrease and Libya - 5 point decrease (because of deterioration of politic and economic situation in this countries).
Table 1
Human Development Index and its components
HDI rank Human development index (HDI) value Life expectancy at birth (years) Mean years of schooling (years) Expected years of schooling (years) Gross national income (GNI) per capita (PPP 2005 $) GNI per capita rank minus HDI rank Nonincome HDI value
1 Norway 0.943 81.1 12.6 17.3 47557 6 0.975
2 Australia 0.929 81.9 12.0 18.0 34431 16 0.979
3 Netherlands 0.910 80.7 11.6 16.8 36402 9 0.944
4 United States 0.910 78.5 12.4 16.0 43017 6 0.931
5 New Zealand 0.908 80.7 12.5 18.0 23737 30 0.978
6 Canada 0.908 81.0 12.1 16.0 35166 10 0.944
7 Ireland 0.908 80.6 11.6 18.0 29322 19 0.959
8 Liechtenstein 0.905 79.6 10.3 14.7 83717 -6 0.877
9 Germany 0.905 80.4 12.2 15.9 34854 8 0.940
10 Sweden 0.904 81.4 11.7 15.7 35837 4 0.936
62 Trinidad and Tobago 0.760 70.1 9.2 12.3 23439 -26 0.750
63 Kuwait 0.760 74.6 6.1 12.3 47926 -57 0.705
64 Libya 0.760 74.8 7.3 16.8 12637 0 0.795
65 Belarus 0.756 70.3 9.3 14.6 13439 -8 0.785
66 Russian Federation 0.755 68.8 9.8 14.1 14561 -13 0.777
67 Grenada 0.748 76.0 8.6 16.0 6982 30 0.829
68 Kazakhstan 0.745 67.0 10.4 15.1 10585 4 0.786
69 Costa Rica 0.744 79.3 8.3 11.7 10497 4 0.785
70 Albania 0.739 76.9 10.4 11.3 7803 18 0.804
Table 2
Human Development Index trends, 1980-2011
Human development index (HDI) value HDI rank change
HDI rank 1980 1990 2000 2005 2009 2010 2011 2006-2011
1 Norway 0.796 0.844 0.913 0.938 0.941 0.941 0.943 0
2 Australia 0.850 0.873 0.906 0.918 0.926 0.927 0.929 0
3 Netherlands 0.792 0.835 0822 0.890 0.905 0.909 0.910 5
4 United States 0.837 0.870 0.897 0.902 0.906 0.908 0.910 -1
5 New Zealand 0.800 0.828 0.878 0.899 0.906 0.908 0.908 0
6 Canada 0.817 0.857 0.879 0.892 0.903 0.907 0.908 3
7 Ireland 0.735 0.782 0.869 0.898 0.905 0.907 0.908 -3
8 Liechtenstein 0.904 0.905
9 Germany 0.730 0.795 0.864 0.895 0.900 0.903 0.905 -2
10 Sweden 0.785 0.816 0.894 0.896 0.898 0.901 0.904 -2
62 Trinidad and Tobago 0.673 0.676 0.701 0.728 0.755 0.758 0.760 2
63 Kuwait 0.688 0.676 0.754 0.752 0.757 0.758 0.760 -8
64 Libya 0.741 0.763 0.770 0.760 -5
65 Belarus 0.723 0.746 0.751 0.756 1
66 Russian Federation 0.691 0.725 0.747 0.751 0.755 -1
67 Grenada 0.746 0.748
68 Kazakhstan 0.657 0.714 0.733 0.740 0.745 2
-169 Costa Rica 0.614 0.656 0.703 0.723 0.738 0.742 0.744
70-1 Albania 0.656 0.691 0.721 0.734 0.737 0.739
It should be noted that Soviet Union had high quality of human capital by ensuring that the labour force had a high level of general education. Moreover, the planned system offered a peculiar scheme of non-market incentives (mainly in the form of a high standard of living) to the Russian intellectual elite. Scientists and researchers, therefore, could benefit from a high social status, several fringe benefits and higher wages than those paid to the rest of the economy. Moreover, during the first years of the transition, the public expenditure on education declined by 55 % in real terms, while the growth in private expenditure did not offset the drop in public funding. A study conducted by UNICEF provides evidence of the significant slumps in education expenditure in Russia (-33 %) and other transition countries between 1989 and 2001 [3].
Also following indices are used for estimation of human capital: 1. Inequality-adjusted Human Development Index (picture 2) is calculated from 2010, it draws on the Atkinson family of inequality measures. The distributions have different units - life expectancy is distributed across a hypothetical cohort, while years of schooling and income are distributed across individuals.
HDI conceals disparities in human development across the population within the same country. Two countries with different distributions of achievements can have the same average HDI value. The IHDI takes into account not only the average achievements of a country on health, education and income, but also how those achievements are distributed among its citizens by «discounting» each dimension's average value according to its level of inequality. Generally countries with less
human development also have more multidimensional inequality and thus larger losses in human development due to inequality, while people in developed countries experience the least inequality in human development.
Inequality-adjusted Human Development Index ilHDI)
Picture 2. Inequality-adjusted HDI system
2. Gender Inequality Index (picture 3) is a new index for measurement of gender disparity, it was introduced in 2010. It reflects gender-based disadvantage in three dimensions - reproductive health, empowerment and the labour market -for as many countries as data of reasonable quality allow. The index shows the loss in potential human development due to inequality between female and male achievements in these dimensions.
Gender Inequality Index (Gil)
Picture 3. Gender Inequality Index system
The world average score on the GII is 0.492, reflecting a percentage loss in achievement across the three dimensions due to gender inequality of 49.2 %. Regional averages range from 31 % in Europe and Central Asia, to 61 % in Sub-Saharan Africa. At the country level losses due to gender inequality range from 4.9 % in Sweden, to 76.9 % in Yemen [2].
Index misses important dimensions, such as time use - the fact that many women have the additional burden of care giving and housekeeping, which cut into leisure time and increase stress and physical exhaustion. Asset ownership, gender-based violence and participation in community decision-making are also not captured, mainly due to limited data availability.
3. Multidimensional Poverty Index was developed in 2010 and uses different factors to determine poverty beyond income-based lists (picture 4). It identifies multiple deprivations at the individual level in education, health and standard of living. It uses micro data from household surveys, and - unlike the IHDI - all the indicators needed to construct the measure must come from the same survey.
DIMENSIONS Health Education Standard of living
INDICATORS Nutrition Child mortality Years Children Cooking fuel Toilet Water Electricity Floor Assets
of schooling enrolled
i
POVERTY Intensity Headcount
MEASURES of poverty ratio
i
Multidimensional Poverty Index (MPI)
Picture 4. Multidimensional Poverty Index system
The following ten indicators are used to calculate the MPI: education (each indicator is weighted equally at 1/6); years of schooling: deprived if no household member has completed five years of schooling; child school attendance: deprived if any school-aged child is not attending school up to class 8; health (each indicator is weighted equally at 1/6); child mortality: deprived if any child has died in the family; nutrition: deprived if any adult or child for whom there is nutritional information is malnourished; standard of Living (each indicator is weighted equally at 1/18); electricity: deprived if the household has no electricity; sanitation: deprived if the household's sanitation facility is not improved, or it is improved but shared with other households; drinking water: deprived if the household does not have access to safe drinking water or safe drinking water is more than a 30-minute walk from home roundtrip; floor: deprived if the household has a dirt, sand or dung floor; cooking fuel: deprived if the household cooks with dung, wood or charcoal; assets ownership: deprived if the household does not own more than one radio, TV, telephone, bike, motorbike or refrigerator and does not own a car or truck [2].
MPI identifies overlapping deprivations at the household level across the same three dimensions as the Human Development Index (living standards, health, and education) and shows the average number of poor people and deprivations with which poor households contend.
Thus, four indexes together (HDI, IHDI, DII and MPI) are used to determining human capital in the world. They supplement each other, because HDI shows general human capital accumulation, IHDI levels disparities in human development across the population, DII indicates inequality in human capital between female and male achievements in these dimensions and MPI determines overlapping deprivations at the household level across the same dimensions as the HDI.
List of reference links
1. URL: http://econlog.econlib.org/archives/2009/05/against_the_hum.html - Bryan Caplan. Against the Human Development Index.
2. URL: http://hdr.undp.org - Human Development Reports.
3. Algieri, B. Human Capital in Russia / B. Algieri // The European Journal of Comparative Economics. - 2006. - V. 3, № 1. - P. 103-129.
