The method for determining a nation’s overall progress in key dimensions of human development involves a composite statistic. This statistic aggregates normalized indices of life expectancy, education, and per capita income indicators. The life expectancy index reflects the average number of years a newborn infant would live if prevailing patterns of mortality at the time of birth were to stay the same throughout their life. The education component is composed of mean years of schooling for adults aged 25 years and older and expected years of schooling for children of school entering age. Finally, the income component assesses the gross national income per capita, adjusted for purchasing power parity (PPP) to reflect the relative buying power of currencies across countries.
This composite index serves as a crucial benchmark for comparing well-being levels across nations and tracking progress over time. Its value lies in providing a broader picture of human advancement beyond purely economic measures. It highlights the significance of health and education alongside economic prosperity. Historically, its introduction marked a shift towards a more people-centered approach to development assessment, emphasizing that national success should be measured not just by economic growth, but also by improvements in people’s lives. It is used by governmental and non-governmental organizations to measure the development of countries.
