Measuring Human Development in a High-Income Country: A Conceptual Framework for Well-Being Indicators

This paper is concerned with the construction of an appropriate conceptual framework for measuring human development with a focus on high-income countries. Too often, the measurement exercise is based on a purely empirical basis where indicators simply reflect data availability and “conventional wisdom”. This is likely to misguide policy-makers. We deal with two core points for the construction of a conceptual framework: (a) specification of the theoretical approach and (b) identification of the relevant categories of indicators. The paper endorses the capability approach which is the theoretical underpinning of human development. In line with this perspective, it offers a view of the relationships between key concepts such as human development, well-being, capabilities, and functionings. Based on this framework, it then tries to identify which typology of indicators is more suitable for measuring people's functionings. Building on a multidisciplinary literature, we classify indicators as input, output, outcome, and impact indicators, and conclude that outcome indicators are the best solution for measuring functionings. Finally, the paper provides examples of theoretically robust indicators and argues for a focus on more advanced functionings in high-income countries.