Inequality in Human Development: An empirical assessment of thirty-two countries

One of the most frequent critiques of the HDI is that is does not take into
account inequality within countries in its three dimensions. In this paper, we
apply a simply approach to compute the three components and the overall
HDI for quintiles of the income distribution. This allows a comparison of the
level in human development of the poor with the level of the non-poor within
countries, but also across countries. This is an application of the method
presented in Grimm et al. (2008) to a sample of 21 low and middle income
countries and 11 industrialized countries. In particular the inclusion of the
industrialized countries, which were not included in the previous work, implies
to deal with a number of additional challenges, which we outline in this paper.
Our results show that inequality in human development within countries is
high, both in developed and industrialized countries. In fact, the HDI of the
lowest quintiles in industrialized countries is often below the HDI of the
richest quintile in many middle income countries. We also find, however, a
strong overall negative correlation between the level of human development
and inequality in human development.