A salient way used to determine those effects is assessing the HDI (Human Development Index) of host country before and after receiving the foreign direct investment. HDI is calculated with regards to three aspects of education, longevity and income. Although, until now, HDI has its own drawbacks that need special attention. Therefore, since 2010, a new measurement called Inequality-adjusted Human Development Index (IHDI) has been created and calculated by United Nations Development Program. This new variable is a better proxy for sustainable development measurement given that it not only covers the human development in general but takes into account the aspects of inequality in human development as well. | Taäp 05 2021 TAØI CHÍNH QUOÁC TEÁ The effect of foreign direct investment FDI on inequality - adjusted human development index IHDI Trần Thị Hồng Nhung - CQ56 I n this increasingly globalized world foreign direct investment FDI is a hotly debated topic regarding its effects on the host countries economic growth and social development thus might indirectly have positive effect on human development of the recipients FDI on its own causes negative consequences to the host countries for both human development and mostly income inequality. Therefore recently there have been many researchers studying the effects of FDI on the growth of human. A salient way used to determine those effects is assessing the HDI Human Development Index of host country before and after receiving the foreign direct investment. HDI is calculated with regards to three aspects of education longevity and income. Although until now HDI has its own drawbacks that need special attention. Therefore since 2010 a new measurement called Inequality-adjusted Human Development Index IHDI has been created and calculated by United Nations Development Program. This new variable is a better proxy for sustainable development measurement given that it not only covers the human development in general but takes into account the aspects of inequality in human development as well. Positive effects of FDI on IHDI Firstly the positive impacts of FDI on income. FDI can raise the income of the labor force mainly by creating jobs and improving the quality of local human resources. Craigwell 2006 investigated the impact of FDI on employment in the Caribbean region in the period of 1990-2000. The results suggested that an increase in FDI leads to an approximate one-to-one increase in employment . In addition FDI inflows are not just creating more employment but according to Javorcik 2012 jobs generated by FDI sector tend to be good ones. Such jobs are likely to pay higher wages than those of domestic firms in .
