How does the Human Development Index (HDI) measure economic growth?

The Human Development Index (HDI) is a composite measure that assesses the overall development of a country by considering three key dimensions: health, education, and income. While the HDI does not directly measure economic growth, it incorporates indicators related to income, which indirectly reflect the economic well-being of a nation.

To measure economic growth, the HDI includes the Gross National Income (GNI) per capita as one of its components. GNI per capita represents the average income earned by individuals in a country and is calculated by adding up all the income generated within a nation (including income from abroad) and dividing it by the total population. This indicator provides a measure of the economic resources available to individuals in a country and is an important factor in determining their overall well-being.

In addition to GNI per capita, the HDI also considers other indicators related to income, such as the Inequality-Adjusted Human Development Index (IHDI) and the Poverty Index. The IHDI takes into account income inequality within a country, recognizing that even if a nation has a high average income, if it is distributed unequally, it may not lead to overall development and well-being for all its citizens. The Poverty Index, on the other hand, measures the percentage of the population living below the poverty line, providing insights into the extent of economic deprivation within a country.

While the HDI incorporates income-related indicators, it is important to note that economic growth alone does not guarantee human development. The HDI recognizes that development is a multidimensional concept that goes beyond economic factors and includes aspects such as health and education. Therefore, the HDI also includes indicators related to life expectancy at birth and expected years of schooling, which reflect the overall well-being and human capital development of a nation.

In summary, the HDI indirectly measures economic growth by including indicators such as GNI per capita, the IHDI, and the Poverty Index. However, it goes beyond economic factors and incorporates dimensions related to health and education to provide a comprehensive assessment of a country's overall development and well-being.