According to the UNDP, this index is a composite measure to quantify the loss of achievement within a country due to gender inequality.
The GDI and GEM became the primary indices for measuring global gender inequality for the United Nations Human Development Reports.
With international growing concern for gender equality, the participants of the World Economic Forum in 2007, among others, recognized that the advancement of women was a significant issue that impacted the growth of nations.
[4] Given the amount of criticism the GDI and GEM were facing, the UNDP felt that these indices did not fully capture the differences between gender.
In an attempt to reform the GDI and GEM, the UNDP introduced the Gender Inequality Index (GII) in the 2010 Human Development Report.
[7] The new index is a composite measure which, according to the UNDP, captures the loss of achievement due to gender inequality using three dimensions: reproductive health, empowerment, and labor market participation.
[10] A high AFR, which measures early childbearing, results in health risks for mothers and infants as well as a lack of higher education attainment.
[10] The empowerment dimension is measured by two indicators: the share of parliamentary seats held by each sex, which is obtained from the International Parliamentary Union, and higher education attainment levels, which is obtained through United Nations Educational, Scientific and Cultural Organization (UNESCO) and Barro-Lee data sets.
Due to data limitations women's income and unpaid work are not represented in the labor market dimension of GII.
[11] In the absence of reliable earned income data across countries, the UNDP considers labor market participation a suitable substitute for economic aspects of gender inequality.
[10] The GII is an association-sensitive, responsive to distributional changes across dimension,[3] composite index used to rank the loss of development through gender inequality within a country.
[10] Step 1: Treating zeros and extreme values: The maternal mortality rate is truncated systematically at minimum of 10 and maximum of 1,000.
Countries with parliamentary representation reporting at 0 are counted as 0.1 because of the assumption that women have some level of political influence and that the geometric mean can not have a 0 value.
The world average GII score in 2011 was 0.492, which indicates a 49.2% loss in potential human development due to gender inequality.
[3][17] Permanyer believes that simplicity is required in order for analysts, policy-makers, or practitioners to convey a clear message to the general public.
[18] Both Klasen and Schüler as well as Permanyer argue that the GII mixes indices in a few ways which furthers the complexity and poses other issues.
The measurement combines well-being and empowerment which becomes problematic in that it increases the complexity, lacks transparency, and suffers from the problem of using an arithmetic means of ratios.
[19] The authors claim the formula weighs too heavily on reproductive health causing disproportionate data towards poorer countries.
[19] Permanyer also criticizes the GII for whether or not its assessment of gender inequality, and uses of the same set of indicators, are equally relevant or meaningful across all regions of the Globe.
For less-developed countries the use of the MMR and AFR in the dimension of reproductive health may be penalizing although the loss may not be entirely explained by gender inequality.