The Gender Development Index (GDI) measures gender-based gaps in development. Hence, it is a statistic that takes into account disparities between men and women. It considers three basic dimensions of human development which include health, education, and income.
- Health: This dimension considers life expectancy at birth for both males and females. Therefore, it takes into account the disparities in life expectancy between men and women.
- Education: The education component of the GDI is based on two indicators: mean years of schooling and expected years of schooling. When the Gender Development Index (GDI) was introduced in 1995, it considered adult literacy and enrolment rates in the education dimension. Since then, GDI has evolved a lot.
- Income: The income dimension measures the income earned by men and women in a given country. It considers disparities in income between genders.
The GDI provides insights into the relative well-being and development of men and women in a given country. Therefore, it helps to highlight areas where gender inequalities exist and where efforts may be needed to address them.
Econometrics Tutorials
Brief History of GDI
The Gender Development Index (GDI) is also part of the broader Human Development Index (HDI). Furthermore, its development can be traced alongside the evolution of the HDI. The United Nations Development Programme (UNDP) introduced the HDI as a composite measure of a country’s development. It takes into account factors beyond just economic indicators.
- Introduction of HDI (1990): The HDI was first introduced in the Human Development Report in 1990 as an alternative to purely economic measures of development. It aimed to provide a more comprehensive view of a country’s well-being by considering life expectancy, education, and income.
- Introduction of GDI (1995): In the 1995 Human Development Report, the UNDP also introduced the Gender Development Index (GDI) as a specific measure to assess gender disparities in development. The GDI complements the HDI by focusing on gender-specific achievements in health, education, and income.
- Updates and Revisions: Over the years, there have been further updates and revisions to the HDI and its components, including the GDI. These updates often reflect changes in data availability, methodology, and a growing understanding of development indicators.
- Additional Gender-Related Measures: Alongside the GDI, other gender-related measures have been introduced, such as the Gender Inequality Index (GII). The GII provides a more comprehensive assessment of gender inequality by considering reproductive health, empowerment, and labour market participation.
Gender development index: Calculation
The Gender Development Index (GDI) is calculated using a formula that involves three main steps: measuring the gender-specific achievements in health, education, and income; adjusting these achievements to account for gender disparities; and then combining them into a composite index.
Since its inception in the 1995 Human Development Report, the GDI has evolved and several changes have been made in its calculations. For instance, the education dimension is no longer based on Adult literacy and Enrolment rates. Here, we will discuss how GDI is calculated in the Human Development Report 2021-22.
Fixed Values used in GDI
| Indicator | Minimum Value | Maximum Value |
| Life Expectancy at birth | Male = 17.5 Female = 22.5 | Male = 82.5 Female = 87.5 |
| Expected Years of Schooling | 0 | 18 |
| Mean Years of Schooling | 0 | 15 |
| Estimated Income (2017 PPP $) | 100 | 75,000 |
Hence, the GDI includes these fixed values for each dimension to act as goal posts. These are necessary to obtain an index between 0 and 1, and also be able to standardize the Gender Development between men and women. Moreover, these values are the same as the ones used in Human Development Index or HDI.
The choice of these fixed values is based on different rationales. Let us take a look at the Life Expectancy indicator as an example. The minimum and maximum values for males (17.5 and 82.5) and females (22.5 and 87.5) are different. This is implemented because women have a natural or biological advantage of 5 years on average. Thus, the GDI is adjusted for 5 years.
Expected and Mean years of schooling have a minimum of 0 because society can still survive without education. The maximum for Expected years of schooling is 18 because it is equivalent to a Master’s Degree in most countries. Similarly, the maximum for Mean years of schooling is 15 because it is the maximum projected for 2025.
For income, the minimum of $100 is due to the unmeasured subsistence production in economies that is not included in official data. Its maximum value is fixed at $75,000 because studies have shown that there is little or no gain in human development beyond this point of per capita income.
Calculation of GDI
To illustrate the calculation of GDI, we will consider a hypothetical example. It is important to note here that the fixed values and the calculation procedure shown here are the same ones used in the Human Development Report 2021-22. We will not discuss the earlier versions of the GDI.
Suppose, a country has the following values of the indicators:
| Indicator | Female | Male |
| Life Expectancy at birth | 65 | 61 |
| Expected Years of Schooling | 9 | 8 |
| Mean Years of Schooling | 4 | 7 |
| Wage Ratio (Female/Male) | 0.700 | |
| Gross National Income Per Capita (2017 PPP $) | 6500.00 | |
| Share of Economically Active Population | 0.290 | 0.710 |
| Share of Population | 0.5011 | 0.4989 |
Health Dimension
The formula used to estimate the Health dimension for males and females is:
Using this formula, we can calculate the value of the Health dimension for our hypothetical example.
Health (Female) = (65 – 22.5 ) / (87.5 – 22.5) = 0.654
Health (Male) = (61 – 17.5 ) / (82.5 – 17.5) = 0.669
Education Dimension
The general formula for the Education dimension is similar to that of the Health dimension. Since the minimum value for Expected and Mean years of schooling is zero, the formula for the indicators is practically “Actual value” divided by “Maximum value”. Additionally, we have to take the mean of both indicators (Expected and Mean years of schooling) to obtain the Education dimension value.
Education (Female) = [ (9 / 18) + (4 / 15) ] / 2 = 0.383
Education (Male) = [ (8 / 18 ) + ( 7 / 15 ) ] / 2 = 0.456
Income Dimension
Several reasons complicate the calculation of the Income dimension. First, we have to consider the fact that the economically active population for males and females will be different and adjust the indicator accordingly. Secondly, we must adjust the indicator for the total share of the population belonging to males and females. Finally, we have to consider the wage gap between males and females. These are essential because we should consider the proportion of economically active females and the wages they receive as compared to males.
This process involves 3 major steps:
Step 1: calculate the Wage bill using the wage ratio and share of economically active populations.
Wage bill (Female) = ( 0.700 × 0.290 ) / ( ( 0.700 × 0.290 ) + 0.710 ) = 0.222
Wage bill (Male) = 1 – 0.222 = 0.778
Step 2: Calculate Income per capita using share of population and GNI per capita.
Income per capita (Female) = ( 6500 × 0.222 ) / 0.5011 = 2879.665
Income per capita (Male) = ( 6500 × 0.778 ) / 0.4989 = 10136.3
Step 3: Calculate the Income dimension using the minimum and maximum values.
Income Index (Female) = ( ln(2879.665) – ln(100) ) / ( ln(75000) – ln(100) ) = 0.508
Income Index (Male) = ( ln(10136.3) – ln(100) ) / ( ln(75000) – ln(100) ) = 0.698
Calculate GDI by combining the dimensions
After estimating the three dimensions for males and females, we can construct the HDI by combining the indicators.
HDI (Female) = ( 0.654 × 0.383 × 0.508 )(1⁄3)= 0.503
HDI (Male) = ( 0.669 × 0.456 × 0.698 )(1⁄3) = 0.597
Finally, we can obtain the GDI or Gender Development Index by dividing the Female HDI by the Male HDI.
GDI = 0.503 / 0.597 = 0.843
Advantages Of Gender Development Index
- Comprehensive Measurement: The GDI provides a comprehensive measure of gender disparities by considering three crucial dimensions of development: health, education, and income. This allows for a more holistic understanding of gender inequality compared to focusing on a single indicator.
- Incorporation of Gender-Specific Data: GDI incorporates gender-specific data, accounting for differences between men and women in various aspects of development. Hence, this gender-sensitive approach is essential for recognizing and addressing disparities that may be overlooked in broader measures.
- Sensitivity to Gender Inequality: The GDI is sensitive to variations in development achievements between men and women. It highlights areas where gender inequality is more pronounced, therefore, providing valuable insights for policymakers and advocates.
- International and Temporal Comparisons: The GDI allows for comparisons between countries and over time, enabling the assessment of progress in gender equality. Policymakers can use these comparisons to identify successful strategies and areas that require attention.
- Integration with the Human Development Index (HDI): The GDI is part of the HDI framework, which includes life expectancy, education, and income components. This integration allows for a combined assessment of overall human development and gender disparities, offering a more nuanced perspective.
- Policy Guidance: GDI results can guide policymakers in identifying specific areas where interventions are needed to promote gender equality. Whether in health, education, or income, targeted policies can address the identified gender gaps and contribute to broader development goals.
- Advocacy and Awareness: The GDI serves as a tool for advocacy and raising awareness about gender disparities. It helps in communicating the importance of gender equality and encouraging action at national and international levels.
- Global Monitoring of Gender Development: The GDI contributes to the global monitoring of gender development by providing standardized metrics. This facilitates international comparisons and allows organizations and researchers to track progress in gender equality on a global scale.
Limitations of Gender Development Index (GDI)
While the Gender Development Index (GDI) provides valuable insights into gender disparities in development, it also has limitations and drawbacks that should be considered:
- Simplification of Gender Inequality: The GDI simplifies complex issues related to gender inequality by condensing them into three dimensions. This simplicity may overlook certain nuances and intricacies of gender disparities that exist in different societies.
- Inclusion of Only Three Dimensions: The GDI focuses on health, education, and income, but gender inequality extends beyond these dimensions. Issues such as access to resources, political participation, and representation in decision-making are not fully captured by the GDI.
- Data Limitations: GDI calculations are dependent on the availability and accuracy of gender-disaggregated data. In many cases, data for women may be incomplete or less reliable than data for men, which can introduce biases into the index.
- Assumption of Equality within Gender Groups: The GDI assumes equal distribution of resources and benefits within each gender group, which may not be the case in reality. In some societies, certain groups of women may face more significant disadvantages than others.
- Inability to Address Intersectionality: The GDI does not consider intersectionality, which refers to the intersecting factors of gender with other social categories such as race, ethnicity, and socioeconomic status. Failing to account for these intersections may result in an oversimplified understanding of gender disparities.
- Limited Focus on Empowerment: The GDI does not explicitly measure aspects of gender empowerment, such as women’s participation in decision-making, access to credit, and legal rights. These factors are crucial for a comprehensive assessment of gender equality.
Gender Development Index (GDI) vs Gender Inequality Index (GII)
The Gender Development Index primarily focuses on assessing gender disparities in human development based on three dimensions: health, education, and income. Hence, GDI measures the relative achievements of men and women in these three dimensions and provides an index that ranges from 0 to 1, with 1 indicating perfect gender equality.
On the other hand, GII is designed to provide a more comprehensive measure of gender inequality across three dimensions: reproductive health, empowerment, and labour market participation. GII is calculated based on indicators such as maternal mortality, adolescent birth rates, political representation, educational attainment, and labour force participation. GII values also range from 0 to 1 but with higher values indicating greater gender inequality.
While GDI provides insights into gender disparities in specific dimensions, GII offers a more comprehensive assessment by considering a broader set of indicators. Still, many researchers and policymakers use both indices together for a more nuanced understanding of gender inequality.
Econometrics Tutorials
This website contains affiliate links. When you make a purchase through these links, we may earn a commission at no additional cost to you.
