The Human Development Index and human development for VCE Health and Human Development Unit 4 AoS 1
“The concept of human development and the Human Development Index, including its components, advantages and limitations as a measure”
Human development is about creating an environment in which people can develop to their full potential and lead productive, creative lives in accord with their needs and interests: expanding people's choices and freedoms. The Human Development Index (HDI) summarises three dimensions in one score from 0 to 1: a long and healthy life (life expectancy at birth), knowledge (mean years of schooling and expected years of schooling) and a decent standard of living (gross national income per capita). In the 2025 Human Development Report (2023 data), Iceland ranked first (0.972), Australia seventh (0.958) and South Sudan last of 193 (0.388). The HDI is broader than income alone, but it is an average that hides inequality and leaves out many aspects of human development.
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What this dot point is asking
Questions give you HDI data for two or more countries and ask you to explain the difference using the indicators, predict how a program could change an indicator (2025 VCAA: a cholera vaccination program in Zimbabwe), or outline advantages and limitations of the HDI (2023 VCAA).
The concept of human development
The United Nations Development Programme (UNDP) describes human development as creating an environment in which people can develop to their full potential and lead productive, creative lives in accord with their needs and interests. It is about expanding choices and freedoms, not only raising income. People need to be able to lead long and healthy lives, be knowledgeable, have access to the resources needed for a decent standard of living, and participate in the life of their community.
Human development and health are linked in both directions: good health lets people learn, work and participate; education and income improve health.
How the HDI is built
| Dimension | Indicator(s) | What it tells you |
|---|---|---|
| A long and healthy life | Life expectancy at birth | Health, including the effects of child mortality, disease, nutrition and health services |
| Knowledge | Mean years of schooling (adults aged 25+) and expected years of schooling (children entering school) | Education already achieved, and access to education now |
| A decent standard of living | Gross national income (GNI) per capita (in purchasing power parity dollars) | Average command over resources |
Each indicator is converted to an index between 0 and 1 using minimum and maximum values (for example life expectancy from 20 to 85 years), and the HDI is the geometric mean of the three dimension indices, so a very low score in one dimension cannot be fully offset by a high score in another.
Human development groups: very high (0.800 and above), high (0.700 to 0.799), medium (0.550 to 0.699) and low (below 0.550).
Reading the data: HDR 2025 (2023 values)
| HDI rank | Country | HDI | Life expectancy (years) | Expected schooling (years) | Mean schooling (years) | GNI per capita (2021 PPP $) |
|---|---|---|---|---|---|---|
| 1 | Iceland | 0.972 | 82.7 | 18.9 | 13.9 | 69,117 |
| 7 | Australia | 0.958 | 83.9 | 20.7 | 12.9 | 58,277 |
| 17 | United States | 0.938 | 79.3 | 15.9 | 13.9 | 73,650 |
| 111 | Fiji | 0.731 | 67.3 | 13.8 | 10.4 | 12,843 |
| 113 | Indonesia | 0.728 | 71.1 | 13.3 | 8.7 | 13,700 |
| 130 | India | 0.685 | 72.0 | 13.0 | 6.9 | 9,047 |
| 140 | Kiribati | 0.644 | 66.5 | 11.9 | 9.1 | 4,947 |
| 142 | Timor-Leste | 0.634 | 67.7 | 13.3 | 6.2 | 5,435 |
| 160 | Papua New Guinea | 0.576 | 66.1 | 11.5 | 5.0 | 3,971 |
| 164 | Nigeria | 0.560 | 54.5 | 10.5 | 7.6 | 5,569 |
| 193 | South Sudan | 0.388 | 57.6 | 5.6 | 5.7 | 688 |
Source: UNDP, Human Development Report 2025, statistical annex table 1 (released May 2025).
What the table shows:
- Income is not everything. The United States has a higher GNI per capita than Australia and Iceland but a lower HDI (0.938), mainly because its life expectancy is about 4.6 years lower than Australia's. The UNDP's comparison of income rank and HDI rank puts Australia 14 places higher on the HDI than on income, and the United States 7 places lower.
- Health drives large gaps. Nigeria's GNI per capita (5,569) is higher than Kiribati's (4,947), yet its HDI is lower, largely because its life expectancy (54.5 years) is 12 years shorter.
- Our region. Australia's near neighbours range from high (Fiji 0.731) to medium (Kiribati, Timor-Leste) and low (Papua New Guinea 0.576) human development, which helps explain where Australian aid is focused.
The HDI was introduced in the first Human Development Report in 1990 because economic measures such as income per person do not show whether people are actually living better. Countries with similar incomes can differ greatly in life expectancy and education, as the United States and Australia (or Nigeria and Kiribati) show.
Advantages of the HDI
- Broader than income: includes health and education, putting people rather than economic growth at the centre.
- Simple and comparable: one number that ranks countries and tracks progress over time.
- Wide coverage: uses data most countries collect; 193 countries are ranked.
- Highlights policy choices: comparing countries with similar incomes but different HDIs shows what investment in health and education can achieve.
Limitations of the HDI
- It is an average: it hides inequalities within a country, between rich and poor, women and men, regions, and Indigenous and non-Indigenous people.
- It leaves out many aspects of human development: gender equality, human rights, freedom and political participation, safety, environmental sustainability, access to safe water and sanitation, and feelings of wellbeing.
- Narrow indicators: life expectancy does not show quality of life or illness (morbidity); years of schooling do not show the quality of education; GNI per capita does not show how income is distributed.
- Data quality and delays: data are often estimates, several years old, and less reliable in conflict-affected or low-income countries.
Complementary UNDP measures address some limitations: the Inequality-adjusted HDI (discounts the HDI for inequality), the Gender Development Index and Gender Inequality Index, the Multidimensional Poverty Index, and the Planetary pressures-adjusted HDI (adjusts for carbon emissions and material use).
A question gives two countries with different HDI values and asks you to explain the difference using two HDI indicators, then give one advantage and one limitation. Build the answer.
Step 1: Recall the three dimensions and indicators
State that the HDI combines life expectancy at birth (health), mean and expected years of schooling (knowledge) and GNI per capita (standard of living).
Step 2: Use two indicators to explain the gap
Use the data where given. For example, Fiji (0.731) has an expected 13.8 years of schooling and GNI per capita of 12,843, while Papua New Guinea (0.576) has 11.5 years and 3,971: better access to education and higher incomes raise Fiji's HDI.
Step 3: Give one advantage
The HDI captures health and education as well as income, giving a broader, comparable picture of development (1 mark).
Step 4: Give one limitation
It is an average that hides inequalities within a country and ignores factors such as gender equality, environment and human rights, so it can mislead (1 mark).
A vaccination program reaches millions of people in a low-income country. Explain its likely effect on one HDI indicator.
Indicator: life expectancy at birth. Chain: vaccination prevents infection and death from the disease, especially among young children; fewer premature deaths, particularly of infants and children, raise average life expectancy at birth; a higher life expectancy index raises the country's HDI. (Healthier children also miss less school, which could raise years of schooling over time.)
The HDI measures human development. It includes one health indicator (life expectancy) alongside education and income. Health status indicators such as mortality, morbidity and burden of disease are separate.
Knowledge is measured by mean years of schooling (adults) and expected years of schooling (children), not literacy rates. Standard of living is GNI per capita, not GDP or wages.
When the stimulus gives values, quote them. "Country A has a higher life expectancy (72.0 compared with 54.5 years)" earns more than "Country A is healthier".
How this dot point appears in the VCE exam
- Define (1 to 2 marks): human development or the HDI.
- Explain with data (2 to 4 marks): the difference between countries' HDIs using indicators, or how a program affects an indicator.
- Evaluate (2 to 4 marks): advantages and limitations of the HDI as a measure of human development.
Exam-style questions
Questions in the style of VCAA exam questions on this dot point, each with a worked answer. They are written by ExamExplained unless tagged "Past paper"; the year shows the paper a question is modelled on.
2023 VCAA Q3a-bPast paper4 marks[Stimulus: a table of Human Development Index (HDI) (2021) and rank: Philippines 0.699 (rank 116); Cambodia 0.593 (rank 146) (UNDP, 2022).]
a. The Philippines and Cambodia are both middle-income countries.
Refer to two indicators of the Human Development Index (HDI) to explain possible reasons for the difference in HDI between the two countries. (2 marks)
b. Outline one advantage and one limitation of the Human Development Index. (2 marks)
Show worked answer →
Source: 2023 VCE Health and Human Development examination, Question 3a and 3b, and the 2023 examiners' report.
Part a averaged 0.8 out of 2; 50 per cent scored zero. The indicators are life expectancy at birth, mean years of schooling, expected years of schooling and Gross National Income (GNI) per capita. "It was not enough for students to simply state two indicators": each needed to say which country would be higher or lower.
High-scoring response (report). "One indicator of HDI is mean years of schooling. The Philippines may have a greater mean years of schooling than Cambodia, leading to it having a higher HDI. Another indicator of HDI is life expectancy at birth. Cambodia may have a lower life expectancy at birth than the Philippines, leading to it having a lower HDI."
Part b averaged 0.8 out of 2; 43 per cent scored zero. Most students could give an advantage or a limitation, but many could not give one of each. Word it as a strength, not a characteristic: "the HDI produces a single statistic" is true, but the strength is that this allows easy comparison between countries.
Accepted (report). Advantages: a more comprehensive measure than income, education or life expectancy alone; a single statistic that makes it easy to compare development between countries; tracks a country's progress over time; may help governments identify areas for improvement. Limitations: based on national data, so some countries cannot receive a ranking; data collection can be inconsistent between countries, so comparisons may not be accurate; it does not consider factors such as gender equality, human rights, political systems or discrimination; it measures averages, so it hides inequalities within (or between) countries.
High-scoring response (report). Advantage: "The HDI takes into account more than just average incomes, so provides a more comprehensive reflection of the level of human development experienced." Limitation: "The HDI is based on averages, so it does not reflect the variations and inequalities in human development that exist within countries."
2025 VCAA Q5bPast paper3 marks[Stimulus: a WHO article (7 March 2024) reporting that more than 2.1 million Zimbabweans were vaccinated against cholera in a single-dose reactive campaign, funded and supported by the WHO, to curb an outbreak reported in all 10 provinces; by 3 March 2024 there had been more than 27,055 suspected cholera cases, over 71 laboratory-confirmed deaths and 501 suspected deaths since the beginning of 2023.] Explain how the program on page 8 could have an impact on one indicator of the Human Development Index (HDI) of Zimbabwe. (3 marks)Show worked answer →
Source: 2025 VCE Health and Human Development examination, Question 5b, and the 2025 examiners' report. Average 1.2 out of 3; 36 per cent scored zero. Part a (a WHO objective) is on WHO priorities and work.
- What the marks needed
- A specific example from the case study to support the explanation, and an indicator named exactly: life expectancy at birth, expected years of schooling, mean years of schooling or Gross National Income per capita.
- Common issues (report)
- Naming indicators loosely, such as "life expectancy" instead of "life expectancy at birth", or "Gross National Income" instead of "Gross National Income per capita"; and confusing the indicators with the dimensions (a long and healthy life, knowledge, a decent standard of living), which could not be awarded marks.
- High-scoring response (report, summarised)
- Vaccinating 2.1 million people in Zimbabwe reduces the transmission of cholera by increasing resistance to the disease. This reduces deaths from cholera, which increases the HDI indicator 'life expectancy at birth', contributing to an increase in Zimbabwe's HDI.
The report's example uses life expectancy at birth, the most direct link. A schooling indicator could work only if you explain the chain from the vaccination program to that indicator.
Original4 marksThe United States has a higher gross national income per capita (73,650 dollars) than Australia (58,277 dollars) but a lower HDI (0.938 compared with 0.958). Explain why, and outline what this shows about the HDI as a measure of human development.Show worked answer →
- Marks guide (Original, modelled on VCAA criteria)
- 4 marks: uses the data to explain the difference through the other HDI dimensions and draws a valid conclusion about the HDI. 2-3 marks: partial explanation. 1 mark: some relevant information.
- Explanation (about 2 marks)
- The HDI combines health and education with income. Australia's life expectancy at birth (83.9 years) is about 4.6 years higher than the United States' (79.3 years), and its expected years of schooling are higher (20.7 compared with 15.9), so Australia scores higher on the health and knowledge dimensions, which outweighs its lower income.
- What it shows (about 2 marks)
- Income alone does not determine human development: how a country uses its resources to support health and education matters, which is an advantage of the HDI over income measures. But the HDI is still an average, so it does not show inequality within either country.
Practise this
Sources & how we know this
- Human Development Report 2025, statistical annex table 1: Human Development Index and its components — United Nations Development Programme (2025)
- Human Development Index (HDI) — United Nations Development Programme
- 2025 VCE Health and Human Development external assessment report — VCAA (2026)
- 2023 VCE Health and Human Development external assessment report — VCAA (2024)
- VCE Health and Human Development Study Design (from 2025) — VCAA
- VCE Health and Human Development: examination specifications, past examinations and reports — VCAA