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Troubling tradeoffs in the Human Development Index

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  • Ravallion, Martin

Abstract

The 20th Human Development Report introduced a new version of its famous Human Development Index (HDI), which aggregates country-level attainments in life expectancy, schooling and income. The main change was to relax the past assumption of perfect substitutability between its components. Most users will not, however, realize that the new HDI has also greatly reduced its implicit weight on longevity in poor countries, relative to rich ones. By contrast, the new HDI's valuations of extra schooling are now very high—many times the economic returns. An alternative index is proposed that embodies less troubling tradeoffs while still allowing imperfect substitution.

Suggested Citation

  • Ravallion, Martin, 2012. "Troubling tradeoffs in the Human Development Index," Journal of Development Economics, Elsevier, vol. 99(2), pages 201-209.
  • Handle: RePEc:eee:deveco:v:99:y:2012:i:2:p:201-209
    DOI: 10.1016/j.jdeveco.2012.01.003
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    Keywords

    Human development; Life expectancy; Schooling; Income;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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