Inequality and the new human development index

Abstract

Taking as a reference the new human development index introduced by the UN in 2010, we study inequality in the world with respect to achievements in human development. We consider four of the most widely known measures of inequality: the Gini, Theil, Atkinson and Kolm indices. We analyse the evolution of each index over the whole history of UN human development reports (every 5 years, from 1980 to 2010). We find that according to the Gini, Theil and Atkinson measures, the world was significantly more equal in 2010 than in 1980. However, the Kolm index shows that the distribution of human development has worsened.

Keywords:

• human development
• inequality
• Gini
• Theil

JEL Classification:

• I30
• D63

Acknowledgement

Financial support from Ministerio de Ciencia under grant ECO2008-03674, Junta de Andalucía under grants SEJ5980, SEJ4941 and Grupo PAI SEJ426.

Notes

¹Admitting that the changes introduced in 2010 improve the overall quality of the indicator, some drawbacks still persist (see Ravallion, 2010).