October 5, 2015

Indiana ranked 39th among the 50 states for health, education and living standards in 2014, underscoring the need for economic development efforts to focus on making communities attractive to talented workers, says a report from Ball State University.

“The Human Development of Indiana Counties: A Policy Perspective,” a policy brief by Ball State’s Center for Business and Economic Research (CBER), developed a version of the Human Development Index (HDI) to review all 92 Indiana counties.

HDI was created by the United Nations to measure quality of life across countries and assess relative socioeconomic growth. HDI’s ranking system integrates life expectancy at birth to measure a population’s health and longevity, adult literacy rate to measure knowledge and education, and per capita gross domestic product (GDP) adjusted for purchasing power as a measure of the standard of living.

Indiana’s HDI is 50.62 on a scale of 100. Internationally, the United States had a ranking of 91.4, or fifth overall.

“We find that there is disparity in HDI across counties,” says CBER director Michael Hicks, the George and Frances Ball Distinguished Professor of Economics and Business Research. “We find evidence of higher HDI for urban counties relative to rural counties. Cities such as South Bend and Evansville received the highest HDI, whereas Anderson and Terre Haute received the lowest.”

The five counties with the highest HDI scores are Hamilton, Monroe, Tippecanoe, Porter and Boone. Hamilton County achieved the highest HDI at 100. This was followed by Monroe County (92.09) and Tippecanoe County (88.86), both home to Indiana's two largest public universities.

“There is a clear benefit to urban locations and the presence of universities for a variety of factors related to health, education and income,” said co-author Srikant Devaraj, CBER research economist and research assistant professor. “This is apparent in the individual and the aggregate HDI rankings.”

He also noted that the five counties with lowest HDI are LaGrange, Scott, Switzerland, Starke and Crawford, all far from metropolitan areas.

Recommendations

Dagney Faulk, CBER research director and study co-author, said the research offers yet more evidence to adjust state economic development policies to focus on primacy of place — making communities more attractive. Recommendations include:

  • improving K-12 education, with a particular focus on schools in the bottom quartile of performance
  • developing quality of place as a mechanism to attract skilled workers, which would boost the productivity, health and economic conditions within a region
  • improving the responsiveness of local government and adopting the cost savings measures outlined in the Kernan-Shepard Report (for example, transferring township services to county governments)
  • developing local infrastructure to support healthy lifestyles
  • focusing on regional development

Many current policies out of date

Hicks said CBER’s latest research should serve as a clarion call for most Hoosier communities.

“From 2000 to the present, only a dozen or so Indiana counties have seen population growth faster than the nation as a whole,” he said. “Roughly 50 are in relative decline; they are growing at a pace slower than the U.S. as a whole. The remaining 30 Indiana counties are in long-term population decline.

“Current economic development policies, many of which date from the 1960s, have failed to generate significant population and income growth in most Indiana counties. A focus on human capital and quality of place should replace existing economic development efforts at the county and municipal levels.”

HDI offers a clear, low-cost measure of economic conditions within counties, said study co-author Sushil Sharma, associate dean of the Miller College of Business and information systems professor. This is the first study released in collaboration with Ball State’s new Indiana Communities Institute.

By Marc Ransford, Senior Communications Strategist