Dev, Poverty & Human Capital

NODE 01

Economic Growth

• Increase in production of goods/services.
• Measured by Real GDP.
• Quantitative expansion, not complete development.

NODE 02

Economic Development

• Broader than economic growth.
• Improvements in health, education, living standards.
• Broader improvement in human well-being.

NODE 03

Per Capita Income

NI

÷

• National Income ÷ Population.
• Provides an average measure.
• Does NOT tell us how income is distributed.

NODE 04

Standard of Living

• Material conditions in which people live.
• Income, housing, nutrition, healthcare.

NODE 05

Quality of Life

• Extends beyond material income.
• Safety, environment, freedom, participation.
• Income is important, but not everything.

NODE 06

Human Development

• Expanding capabilities and opportunities.
• To lead lives people value.
• Broader perspective than GDP alone.

NODE 07

Human Dev Index (HDI)

• Combines 3 broad dimensions.
• 1. Long and healthy life.
• 2. Knowledge / Education.
• 3. Standard of living (GNI per capita).

NODE 08

Life Expectancy

♥ → 70y

• Indicator of population health & development.
• Reflects healthcare, nutrition, sanitation.

NODE 09

Education

★

• Improves knowledge, skills, productivity.
• Both an outcome AND an investment.

NODE 10

Human Capital

🧠→

• Knowledge, skills, health embodied in people.
• Contributes to productive activity.
• HC → Productivity → Income → Development.

NODE 11

HC Formation

• Developed through education, training.
• Healthcare, nutrition, learning by doing.

NODE 12

Health as HC

→

• Poor health = lower productivity, lost days.
• Better health = improves school attendance, labor participation.

NODE 13

HC vs Physical Capital

⚙vs🧠

• Physical: Machines, buildings, tools.
• Human: Skills, knowledge, health.
• Both contribute to productive capacity.

NODE 14

Poverty

• Lacking resources for an acceptable standard of living.
• Income poverty: Insufficient money.
• Multidimensional: Deprivation across areas.

NODE 15

Absolute Poverty

• Inability to attain defined minimum consumption.
• Uses a fixed poverty threshold.

NODE 16

Relative Poverty

• Compares economic resources with wider society.
• Linked strongly to distribution and social exclusion.

NODE 17

Poverty Line

• Threshold used to identify poor households.
• Measurement tool, not all aspects of poverty.

NODE 18

Headcount Ratio

• Proportion of population below poverty line.
• Number below line ÷ Total population.

NODE 19

Poverty Gap

• How FAR below the poverty threshold people are.
• Provides deeper understanding of poverty intensity.

NODE 20

Multidimensional Poverty

🍎

📖

🚰

• Deprivation even when income might not reveal it.
• Nutrition, schooling, sanitation, housing, water.
• Economic + Social + Human poverty.

NODE 21

Inequality

• Differences in distribution.
• Income, wealth, consumption, opportunities.

NODE 22

Income Inequality

• Economy can have high average income + high inequality.
• Average income alone is insufficient.

NODE 23

Wealth Inequality

• Accumulated assets and liabilities.
• Land, property, financial assets.
• Wealth is a STOCK (Income is a flow).

NODE 24

Income vs Wealth

VS

• Income: Earnings received during a period (Flow).
• Wealth: Net assets at a point in time (Stock).

NODE 25

Lorenz Curve

• Represents distribution of income/wealth.
• Cumulative population vs cumulative share.
• Closer to diagonal = more equal.

NODE 26

Gini Coefficient

• Summary measure of inequality.
• 0 = Perfect equality.
• 1 (or 100) = Maximum inequality.

NODE 27

Causes of Inequality

EDU

JOB

FIN

• Differences in education, skills, inheritance.
• Ownership of assets, technology, regional opportunities.

NODE 28

Opportunity Inequality

→

• Different starting access to health, education, networks.
• Inequality of outcomes partly reflects unequal opportunities.

NODE 29

Intergenerational Pov

↓

• Poverty persists across generations.
• Low income → low investment in children → low human capital.

NODE 30

Poverty Trap

• Low income and low productive capacity reinforce each other.
• Low saving → Low capital → Low productivity.
• Self-reinforcing cycle.

NODE 31

Inequality & Growth

• High inequality can reduce growth (limits human-cap invest).
• But some differences drive incentives/entrepreneurship.
• Distinguish productive incentives from harmful deprivation.

NODE 32

Social Mobility

• Movement between economic/social positions.
• Upward or Downward.
• High mobility = outcomes less determined by starting circumstances.

NODE 33

Inclusive Growth

• Ensuring growth creates broad opportunities across society.
• Employment, education, health, infra, social protection.

NODE 34

Pro-Poor Growth

• Growth producing significant benefits for poorer sections.
• Focuses on poverty reduction, not just aggregate GDP.

NODE 35

Redistribution

• Govt influences distribution via taxes, transfers, subsidies.
• Public education and healthcare.
• Connects to Realm 08.

NODE 36

Social Safety Nets

• Cash transfers, food support, pensions, insurance.
• Reduces vulnerability, protects from economic shocks.

NODE 37

Financial Inclusion

• Access to bank accounts, savings, credit.
• Supports risk management, economic participation.

NODE 38

Employment & Dev

→

• Strongest link between growth and household welfare.
• Growth without jobs = "jobless growth".

NODE 39

Unemployment & Poverty

→

• Reduces income, consumption, skills retention.
• Long-term unemployment has persistent effects.

NODE 40

Gender & Development

• Outcomes differ in edu, health, employment, assets.
• Broad development requires women's capabilities.

NODE 41

Female Labour-Force

• Increases household income, economic output.
• Depends on education, childcare, safety, social norms.

NODE 42

Rural–Urban Dev

MIGRATE →

• Differences in employment, infra, healthcare, education.
• Links strongly to Realm 15.

NODE 43

Regional Inequality

A

B

• Regions differ in income, industry, human capital.
• Balanced development requires attention to spatial inequality.

NODE 44

Basic Services

🚰

⚡

🏥

🏫

• Access to edu, health, safe water, sanitation, electricity.
• Affects capabilities even if monetary income is unchanged.

NODE 45

Capabilities Approach

🕊️

• Amartya Sen: Focus on what people are able to BE and DO.
• Income = means. Capabilities = substantive opportunities.

NODE 46

Development as Freedom

→ OPEN

• Expanding substantive freedoms.
• Freedom from preventable disease.
• Ability to make meaningful choices.

NODE 47

HC & Productivity

📖→

• Education → Skills → Higher Productivity.
• → Higher earnings → Higher productive capacity.

NODE 48

Health & Productivity

♥→

• Nutrition/Health → Healthier workers.
• Fewer lost workdays → Higher effective labour supply.

NODE 49

Dev Indicators Dashboard

ECON

HLTH

DIST

• Economic (PCI), Health (Life Exp).
• Education (Literacy), Distribution (Gini).
• Living conditions (Sanitation).

NODE 50

Infant/Child Mortality

↓

• Important development indicator.
• Declines reflect nutrition, maternal health, sanitation.

NODE 51

Life Expectancy & Income

• Move together, but not perfectly.
• Health can improve via public interventions before high income is reached.

NODE 52

Education & Earnings

🎓→

• Education increases productivity/opportunities.
• Depends on quality and labor-market skills demand.
• More years ≠ automatically higher productivity.

NODE 53

Skill Mismatch

• Workers' skills do not align with job demands.
• Produces unemployment, lower productivity.

NODE 54

Digital Divide

• Unequal access to internet, devices, digital skills.
• Can create new forms of inequality.

NODE 55

Intergen HC Cycle

• Parent Income → Child Nutrition/Edu → Adult Productivity.
• Development policy often focuses heavily on childhood.

NODE 56

Development & Environment

CO₂

• Growth can create higher energy use, resource depletion.
• Growth without sustainability undermines long-term welfare.

NODE 57

Sustainable Development

ECO SOC ENV

• Improving present well-being while preserving the future.
• Balancing Economic, Social, and Environmental dimensions.

NODE 58

SDGs

• Sustainable Development Goals.
• Poverty, health, education, gender, climate.

NODE 59

Dev & Institutions

• Rule of law, property rights, effective government.
• Determines how resources convert to productive outcomes.

NODE 60

Dev & Productivity

→📈

• Long-run living standards depend heavily on productivity.
• Development ≠ redistribution alone.
• Requires expanding productive capacity.

NODE 61

Pov Reduction Master Chain

• Growth+Emp+HC+Infra+Fin Inc → Capabilities.
• → Higher Productivity → Higher Income.
• → Poverty Reduction.

NODE 62

Inclusive Dev Master Chain

• Growth → Emp+Inc → Edu+Health → Human Capital.
• → Productivity → Opportunity → Social Mobility.

NODE 63

Dev Measurement Chain

• GDP → PCI → Poverty → Inequality.
• → Health → Edu → Human Dev → Capabilities.
• Never reduce development to GDP alone.