A household-based human development index

Abstract

One of the most serious weaknesses of the human development index (HDI) is that it does not take into account the distribution of human development within a country. All attempts to capture inequality in the HDI have used aggregate information and there exists no HDI at the household level. We provide a method for proxying the HDI at the household level. This allows the immediate analysis of human development by population subgroups and/or socioeconomic characteristics as well as analysis of inequality in human development across population subgroups and households characteristics. We illustrate our approach for 15 developing countries. Inequality in the HDI is stunningly large for some countries, particularly in countries with low overall human development, driven mostly by very high inequality in the education and income components of the HDI.