poverty in world essay

5 Essays About Poverty Everyone Should Know

Poverty is one of the driving forces of inequality in the world. Between 1990-2015, much progress was made. The number of people living on less than $1.90 went from 36% to 10%. However, according to the World Bank , the COVID-19 pandemic represents a serious problem that disproportionately impacts the poor. Research released in February of 2020 shows that by 2030, up to ⅔ of the “global extreme poor” will be living in conflict-affected and fragile economies. Poverty will remain a major human rights issue for decades to come. Here are five essays about the issue that everyone should know:

“We need an economic bill of rights” –  Martin Luther King Jr.

The Guardian published an abridged version of this essay in 2018, which was originally released in Look magazine just after Dr. King was killed. In this piece, Dr. King explains why an economic bill of rights is necessary. He points out that while mass unemployment within the black community is a “social problem,” it’s a “depression” in the white community. An economic bill of rights would give a job to everyone who wants one and who can work. It would also give an income to those who can’t work. Dr. King affirms his commitment to non-violence. He’s fully aware that tensions are high. He quotes a spiritual, writing “timing is winding up.” Even while the nation progresses, poverty is getting worse.

This essay was reprinted and abridged in The Guardian in an arrangement with The Heirs to the Estate of Martin Luther King. Jr. The most visible representative of the Civil Rights Movement beginning in 1955, Dr. King was assassinated in 1968. His essays and speeches remain timely.

“How Poverty Can Follow Children Into Adulthood” – Priyanka Boghani

This article is from 2017, but it’s more relevant than ever because it was written when 2012 was the worst economic crisis since the Great Depression. That’s no longer the case. In 2012, around ¼ American children were in poverty. Five years later, children were still more likely than adults to be poor. This is especially true for children of colour. Consequences of poverty include anxiety, hunger, and homelessness. This essay also looks at the long-term consequences that come from growing up in poverty. A child can develop health problems that affect them in adulthood. Poverty can also harm a child’s brain development. Being aware of how poverty affects children and follows them into adulthood is essential as the world deals with the economic fallout from the pandemic.

Priyanka Boghani is a journalist at PBS Frontline. She focuses on U.S. foreign policy, humanitarian crises, and conflicts in the Middle East. She also assists in managing Frontline’s social accounts.

“5 Reasons COVID-19 Will Impact the Fight to End Extreme Poverty” – Leah Rodriguez

For decades, the UN has attempted to end extreme poverty. In the face of the novel coronavirus outbreak, new challenges threaten the fight against poverty. In this essay, Dr. Natalie Linos, a Harvard social epidemiologist, urges the world to have a “social conversation” about how the disease impacts poverty and inequality. If nothing is done, it’s unlikely that the UN will meet its Global Goals by 2030. Poverty and COVID-19 intersect in five key ways. For one, low-income people are more vulnerable to disease. They also don’t have equal access to healthcare or job stability. This piece provides a clear, concise summary of why this outbreak is especially concerning for the global poor.

Leah Rodriguez’s writing at Global Citizen focuses on women, girls, water, and sanitation. She’s also worked as a web producer and homepage editor for New York Magazine’s The Cut.

“Climate apartheid”: World’s poor to suffer most from disasters” – Al Jazeera and news Agencies

The consequences of climate change are well-known to experts like Philip Alston, the special rapporteur on extreme poverty and human rights. In 2019, he submitted a report to the UN Human Rights Council sounding the alarm on how climate change will devastate the poor. While the wealthy will be able to pay their way out of devastation, the poor will not. This will end up creating a “climate apartheid.” Alston states that if climate change isn’t addressed, it will undo the last five decades of progress in poverty education, as well as global health and development .

“Nickel and Dimed: On (not) getting by in America” – Barbara Ehrenreich

In this excerpt from her book Nickel and Dimed, Ehrenreich describes her experience choosing to live undercover as an “unskilled worker” in the US. She wanted to investigate the impact the 1996 welfare reform act had on the working poor. Released in 2001, the events take place between the spring of 1998 and the summer of 2000. Ehrenreich decided to live in a town close to her “real life” and finds a place to live and a job. She has her eyes opened to the challenges and “special costs” of being poor. In 2019, The Guardian ranked the book 13th on their list of 100 best books of the 21st century.

Barbara Ehrenreich is the author of 21 books and an activist. She’s worked as an award-winning columnist and essayist.

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About the author, emmaline soken-huberty.

Emmaline Soken-Huberty is a freelance writer based in Portland, Oregon. She started to become interested in human rights while attending college, eventually getting a concentration in human rights and humanitarianism. LGBTQ+ rights, women’s rights, and climate change are of special concern to her. In her spare time, she can be found reading or enjoying Oregon’s natural beauty with her husband and dog.

Global poverty in an unequal world: Who is considered poor in a rich country? And what does this mean for our understanding of global poverty?

What does global poverty look like if we rely on the notions of poverty in countries like denmark, the us, or germany and how should this perspective inform our aspirations for the future of global poverty.

Abstract: The extremely low poverty line that the UN relies on has the advantage that it draws the attention to the very poorest people in the world. It has the disadvantage that it ignores what is happening to the incomes of the 90% of the world population who live above the extreme poverty threshold.

The global poverty line that the UN relies on is based on the national poverty lines in the world’s poorest countries. In this article I ask what global poverty looks like if we rely on the notions of poverty that are common in the world’s rich countries – like Denmark, the US, or Germany. Based on the evidence I ask what our aspirations for the future of global poverty reduction might be.

Note: Since the publication of this article, the World Bank has updated its poverty data. See the note at the end for more information.

In every country of the world there are people living in poverty. Even in the world’s richest countries the poorest people often live in poor housing and struggle to afford basic goods and services like heating, transport, and healthy food for themselves and their family.

Those who are in monetary poverty also have much poorer living conditions more broadly. Even in a rich and relatively equal country like Denmark middle-aged men who are among the poorest 20% of the population die on average 9 years earlier than those among the richest 20%. 1 In Denmark a person who lives on less than $30 per day is considered poor, and it is the declared goal of the country to reduce poverty relative to this threshold. 2

Countries that are much poorer than Denmark also have the goal to reduce poverty. The United Nations declared the objective of ending ‘extreme poverty’ to be the number 1 goal of the global Sustainable Development Goals . According to the UN a person is considered to live in extreme poverty when he or she is living on less than $1.90 per day, this is called the International Poverty Line . According to the latest global statistics almost one in ten people live in extreme poverty globally.

If we know that poverty is a large problem even in high income countries like Denmark where the poverty line is set at around $30 a day, why should we use an International Poverty Line that is so extremely low to measure poverty globally?

It is the reality of our extremely unequal world – in which every tenth person lives in extreme poverty – that makes such an extremely low poverty line necessary. Without having an extremely low poverty line we would not be aware of the fact that a large share of the world lives in such extreme poverty. The UN’s global poverty line is valuable because it draws attention to the reality of extreme poverty in our world.

In a world where the majority still lives on very low incomes it would be wrong if the UN decided to measure global poverty solely by a poverty line as high as the poverty line of Denmark. It would mean that the global statistics gloss over the extremely large and important income differences among the poorest billions in the world. It would mean that the difference between those who live on only $1 per day and those who have an income that is more than 20-times higher would be entirely disregarded. They would all be considered poor, and the reality that some of them are much poorer than others would be hidden.

Slightly higher global poverty lines – such as the poverty line of $3.10 per day that Kate Raworth relies on in her ‘Doughnut’ framework, or the poverty line of $7.40 per day that anthropologist Jason Hickel uses in his work, or Bob Allen’s absolute poverty line based on minimal nutritional requirements – all have the same value. 3  These low poverty lines allow us to understand the material living conditions of the poorest people in the world and have been successful in drawing attention to the terrible depths of poverty experienced by a large share of the world's population. The only way to achieve these goals is to rely on extremely low poverty lines.

Indeed, there is an argument for using an even lower poverty line. To understand what is happening to the very poorest in the world, we need to look even lower than $1.90. This is because one of the biggest failures of development is that over the last decades the incomes of the very poorest people have not risen. A big part of the reason for why this issue doesn’t get discussed enough is that the International Poverty Line we rely on is too high to see this fact.

Why not both?

Yet, only measuring global poverty relative to such extremely low poverty lines has its own large downside.

By focusing on an income threshold that is lower than the incomes of 90% of the global population we are ignoring what is happening to the majority of the world’s population. This matters. The majority of the world do not live in extreme poverty anymore , but billions are nevertheless living in great poverty still.

The obvious solution to the problem that the majority of the world is not considered by the International Poverty Line is to use an additional poverty line. This is not a new idea. One poverty researcher who has made the argument for an additional higher global poverty line based on the notions of poverty in rich countries is Lant Pritchett – you find it in his short, yet widely-cited essay ‘The case for a high global poverty line’ from eight years ago. 4

Defining global poverty lines

The definition of poverty differs between countries. Poorer countries set much lower poverty lines than richer countries. 5 This means that if we were to simply rely on national poverty definitions for a global measure of poverty we would end up with a measurement framework in which where a person happens to live would determine whether they are poor or not: If we would count as poor those who are defined nationally as poor we would end up counting a person who lives on $20 per day as poor in a rich country, while at the same time counting a person who lives on $2 as not-poor when they happen to live in a very poor country.

One way out of this problem is to set global poverty lines based on the national definitions, but to apply them globally. This is how the UN decided to define the International Poverty Line. In order to ground this global poverty line on something more than the views of global poverty researchers, it is based on the existing definitions of poverty adopted in countries around the world at the national level, but to avoid the problem outlined above they apply the national poverty lines globally. As we explain here in some detail, the $1.90 per day poverty line is set to reflect the national poverty lines adopted in the world’s poorest countries. 6 Applying this poverty line globally means that a person who lives on less than $1.90 per day is considered extremely poor no matter where they live.

In recent years the World Bank has applied this same methodology to countries in the middle-income bracket, those countries with a GNI per capita between $1000 and $12,500. Based on the poverty lines in these countries they have set additional global poverty lines at $3.20 and $5.50 per day, which are now directly available via the World Bank statistics. 7

What I want to do here is to see what a global poverty line would be if we rely on the notion of poverty in rich countries — countries like Denmark, the US, or Germany. 8 That is what Pritchett suggested eight years ago: “Since the origin of the [International Poverty Line] was just to adopt as a global lower bound the poverty lines used by the poorest countries, it symmetrically makes sense to say that the global upper bound poverty line is based on the poverty line used in rich countries.”

The definition of poverty is certainly not an easy ethical question and thoughtful people disagree about it in ways that have meaningful consequences for our understanding of the world. There are also interesting proposals for hybrid poverty lines that combine absolute and weakly-relative measures; see Ravallion (2019) for a recent proposal. 9 And I would also recommend Tony Atkinson’s last book ‘ Measuring Poverty around the World ’ for an excellent recent overview of the topic.

→ To understand how it is possible to compare poverty levels and living standards across countries you need to know the basics of global poverty measurement. You find a summary of the basics in the following fold-out box.

The basics of global poverty measurement

Throughout this article – and in global income and expenditure data generally – the statisticians who produce these figures are careful to make these numbers as comparable as possible.

First, many poorer people rely on subsistence farming and do not have a monetary income. To take this into account and make a fair comparison of their living standards, the statisticians that produce these figures estimate the monetary value of their home production and add it to their income/expenditure.

Second, price changes over time (inflation) and price differences across countries are both taken into account: all measures are adjusted for differences in purchasing power. 10 To this end incomes and expenditures are expressed in so-called international dollars . This is a hypothetical currency that results from the price adjustments across time and place. An international dollar is defined as having the same purchasing power as one US-$ in the US . This means no matter where in the world a person is living on int.-$30, they can buy the goods and services that cost $30 in the US. None of these adjustments are ever going to be perfect, but in a world where price differences are large it is important to attempt to account for these differences as well as possible, and this is what these adjustments do. 11

Throughout this text I’m always adjusting incomes for price changes over time and price differences between countries in this way. All dollar values discussed here are presented in int.-$; the UN does the same for the $1.90 poverty line. Sometimes I leave out ‘international’ as it is awkward to repeat it all the time; but every time I mention any $ amount in this text I’m referring to international-$ and not US-$. 12

An additional higher poverty line of $30 per day

Pritchett made his proposal based on data and prices a decade ago and so it is necessary to update his calculations. But I want to go beyond Pritchett’s approach and additionally provide a number of other relevant comparisons to inform our understanding of who is considered poor in a rich country.

By following this idea I find that a poverty of 30 international-$ per day corresponds to the notion of poverty in a rich country. In the following section I consider a long number of benchmarks that made me arrive at this poverty line. Here is the short summary of these comparisons:

• European countries: The span of poverty lines in high-income countries in Europe ranges from int.-$25 to int.-$38 per day .
• The US: A comparison with the poverty line in the US is not straightforward, as explained in some detail below; two different approaches arrive at poverty lines of int.-$23 and int.-$35 per day respectively.
• Survey result: A study surveyed people in a high-income country to ask at what income a person is considered poor. The study found that the mean income threshold suggested by the surveyed population corresponds to an income of int.-$37.58 per day
• UBI: The daily income paid as ‘Universal Basic Income’ in a pilot study in Germany corresponds to an income of int.-$48.19 per day .
• Social care: The average basic social care payout in Germany (‘Hartz-IV’) corresponds to int.-$30.78 per day

The range of possible higher poverty lines based on richer countries is wide, as the list of benchmarks suggests. At the lower end I believe that it might be as low as $25 per day, and on the higher end it might be as high as $40 or $50 per day.

Just as someone who lives on less than $1.90 per day is defined as extremely poor, a person who lives on less than $30 a day could be considered moderately poor.

A reality check for any poverty line you might want to consider is to ask yourself what you think about living on less than that poverty line yourself. I lived on less than $30 per day before and would consider myself poor if I’d fall back on that income level again.

In the following box you find the sources and calculations of the benchmarks that led me to my $30 per poverty line proposal.

Who is considered poor in rich countries? Poverty lines and other relevant benchmarks

Poverty lines in european countries.

As mentioned before most European countries set their poverty line at 60% of the median income in the country. In his original proposal Pritchett was relying on this 60% of median cut-off.

Calculating the poverty line for European countries therefore means that we look up their median income and then multiply it by 0.6. This is less straightforward than it might first appear. The reason for that is that there are many different income concepts. You quickly realize that it is not easy to define a person’s income if you ask yourself what your own income is. Do you take government transfers into account or not? Do you take your partner’s income into account and divide it by two? How do you take into account that you have a child for which you need to pay? It is possible to take these and many other aspects into account and arrive at useful statistics, but various sensible ways of addressing such questions lead to many different income metrics. As such, in comparing different poverty thresholds across countries we have to take care to avoid mixing different income concepts as much as possible.

One important difference is how incomes are adjusted for the size of the household: whether the total household income is simply divided by the number of people (including children) – ‘per capita’ income – or whether some adjustment is made to account for the fact that larger households, and particularly households with children, face lower costs per person – known as ‘equivalised’ income. Whereas EU countries, like other rich countries, use equivalised income to measure poverty, the UN’s measurement of global poverty is based on a global dataset of per capita incomes. This dataset is called PovcalNet , and it is this that we must use in order to make comparisons of poverty measures in different countries according to the same income concept.

In this dataset we find the median income for countries around the world and we can take that median income and then apply the logic on which the European poverty lines are based. In the extensive footnote here you find more details and the full calculations. 13

As high-income European countries I’m referring to those European countries, which according to the Eurostat statistics had a higher income in 2019 than the European average. These are the following countries: Finland, Netherlands, Belgium, Sweden, Germany, France, Iceland, Switzerland, Norway, Luxembourg, Denmark, Austria, Ireland, and the UK.

These are the poverty lines for daily income in a number of high-income European countries (based on 60% of the median incomes from PovcalNet):

• Sweden: $29.40 per da
• Norway: $37.80 per day
• Austria: $31 per day
• UK: $25.04 per day
• Switzerland: $35.82 per day
• Germany: $28.35 per day
• France: $27.28 per day
• Luxembourg: $43.86 per day
• Finland: $27.22 per day
• Iceland: $31.64 per day
• Ireland: $24.68 per day
• Netherlands: $28.6 per day
• Belgium: $26.92 per day
• Denmark: $29.06 per day

The span of poverty lines in these countries ranges from $25 (for the UK and Ireland) up to $38 (for Norway); in the small country of Luxembourg the poverty line is higher.

The poverty line in the US

Unlike European countries, the US does not set the poverty line in a relative way. Instead the US poverty line dates back to the work of Mollie Orshansky, an economist working for the Social Security Administration in the early 1960s. Since then it has been of course revised for price changes, but otherwise it remained unchanged.

The US poverty line is very often criticised as being too low. Those that criticize the US poverty line in that way therefore suggest that the severity of poverty in the US is understated in the statistics.

How high is the poverty line in the US? In 2020 the poverty threshold for a single person under 65 was $30, measured in 2011 international-$ per day to be comparable with the other figures in this article. 14

Now the problem with comparing this poverty line with the global statistics is again that the income concept is different. The US crucially relies on an equivalence scale for adjusting the income cutoff depending on the household size.

One alternative is to use the World Bank's poverty and inequality data – which expresses incomes in per capita terms – to find a 'harmonized' poverty line: the line that yields the same poverty rate in the World Bank data as the official poverty rate. 15

The official poverty rate in the US in 2019 was  10.5% ,  as reported  by the U.S. Census Bureau. The poverty line that yields this rate in the World Bank's data is $22.53 (measured in 2011 international-$). 16

An alternative is to apply the same concept that the Europeans are using for their poverty line determination. If the US would use the 60% of median income definition of poverty their poverty line would be int.-$32.8 per day 17 Very close to the one-person poverty line based on Orshansky’s work.

A somewhat comparable poverty line based on these three approaches therefore falls into the range of around $23 to $35 per day. Within the range of poverty lines in European countries.

Survey results – Below which income do you consider a person poor?

The UN and Pritchett rely on the existing poverty lines in low-income and high-income countries respectively to derive their poverty lines. We can follow other approaches too.

An obvious one is to ask what people out there believe: Who is considered poor in a high-income country by people in high-income countries?

For the regular poverty report of the German government, a survey is conducted that asks Germans below which income level they consider someone as poor. The latest data is from the year 2015. 18

The mean answer given by the German population for a cutoff below which a person is considered poor was 947€ per month. In international dollars per day this corresponds to an income of int.-$37.58 . 19

Universal Basic Income

Universal Basic Income (UBI) is a political idea that is becoming rapidly more popular.

A large UBI study in Germany – called ‘Mein Grundeinkommen’ – sets this income at €1200. In international-$ this corresponds to an income of int.-$48.19 per day . 20

Social security in Germany

Germany pays basic social care for its citizens. This social security payment is referred to as ‘Hartz-IV’.

How much a person receives depends on the particular circumstances of the individual, but we can look at the average payment. In 2018 a single person received on average 783 Euro per month. That corresponds to int.-$30.78 per day . 21

The Roslings’ suggest a cutoff of $32 per day

Anna Rosling-Rönnlund, Ola Rosling and Hans Rosling challenged the old dichotomy between developed and developing countries in their bestselling book ‘ Factfulness ’. They argue that the old dichotomy corresponds to a view of the world that was accurate half a century ago when a few countries were relatively well-off, but most countries were living in very poor conditions .Today, they say, people around the world live on a large spectrum. To reflect this spectrum they proposed 4 income levels.

The first cut-off corresponds to the international poverty line (rounded to int.-$2 per day). The next income cutoff they set at $8 per day, the following one at $16 and the highest one at int.-$32 per day .

Kahneman's and Deaton's study of income and emotional well-being

Nobel laureates Daniel Kahneman and Angus Deaton published a famous study on the link between life satisfaction and income. 22

The authors find that higher incomes go together with higher self-reported life satisfaction, but for people’s self-reported emotional well-being this is only true up to a certain point: the study finds that above $75,000 further increases in income do not correspond with improvements in people’s emotional well-being – a finding that is often cited to argue that additional economic growth does not improve people’s lives in high-income countries. 23

Again, the income concept is not the same as that in PovcalNet, and so comparisons with the global data are not directly possible. But we can ask what the daily income at which emotional well-being supposedly levels off corresponds to: $75,000 per year are int.-$205 per day .

It is certainly worth considering whether an income up to which emotional well-being increases could be taken as the basis for a definition of poverty. A US company reacted to the research finding of Kahneman and Deaton by using it to set the minimum wage in their company: everyone in that company gets paid that salary.

For the discussion of global poverty however it might be considered as an even higher poverty line, but for any practical purpose in the world today the income cutoff would be too high as only a very small fraction of the world lives on more than $75,000 per year.

How many people in the world live in poverty?

We have seen that 10% of the world live in extreme poverty as defined by the UN. How large is the share of the world that lives in moderate poverty?

The latest global data tells us that 85% of the world population live on less than $30 per day . These are 6.5 billion people.

Relying on a higher poverty line of $45 per day you find that 92% live in poverty, and using a lower poverty line of $20 per day you find that 78% live in poverty. No matter which of these poverty lines you might want to choose, at least three-quarters of the world live in poverty.

All of this data refers to pre-pandemic times. The global recession has certainly increased the share below any of these cutoff points. As soon as the new data is available you will find it on Our World in Data.

The chart shows where in the world people are poor. If we would only rely on the UN’s extreme poverty line we would conclude that barely anyone lives in poverty in high-income countries. Relying on higher poverty lines, this data here shows that even in high-income countries there is a significant share of the population that lives in poverty. No country, not even the high-income countries, has eliminated poverty. There are no ‘developed countries’ — there is work to do for all.

But just as clear from this data is the fact that in many world regions the large majority of people are very poor. In Sub-Saharan Africa about 40% of the population lives on less than $1.90 per day as the chart shows. In all regions outside of high-income countries more than 85% of all people live in moderate poverty.

Countries in which the majority do not live in poverty have only left poverty behind in recent history

Two centuries ago the global income distribution was very different. Back then almost everyone in the world was living in extreme poverty. Those places in which few people live in moderate poverty today only left poverty behind in the very recent past.

Denmark is one of those places. The reason why the majority of people in Denmark is not living in poverty is that the economic inequality is low and the average income high.

The fact that the inequality is low you can see on the map. It shows an inequality measure called the Gini coefficient (explained here ) which makes clear that Denmark is among the least unequal countries in the world.

The reason that the average income in Denmark is high is due to the fact that average incomes have increased steadily for the last two centuries; this long-term development is called economic growth. As the historical data shows the average incomes in Denmark are today more than 20-times higher than in the past.

You can add any other country to this chart. By adding one of those countries in which the majority lives in poverty – like Ethiopia – you see just how large the differences in average incomes are.

GDP per capita is by far the most widely used measure of average income and is yet another income concept from the two I mentioned so far. 24 It is a more comprehensive measure of incomes and crucially takes into account government expenditures. For these and other reasons (mentioned in the long footnote) you will find that dividing GDP per capita by 365 days will let you arrive at a higher value than the income that is determined in household income surveys. 25

Billions of people live in countries where average incomes are very low

The income of every person depends on two factors, the average income in the country they live in and the position that particular person has in that country’s income distribution. This chart here shows the average income in countries around the world. The height of each bar represents the average daily income in a country, the width of each country corresponds to the country’s population size. I have ordered the countries by income: from the poorest country on the very left (South Sudan where the average person lives on $1.12 per day) to the richest country on the very right (Luxembourg with an average of $86 per day).

After two centuries of economic growth the average income in Denmark is now $57 per day today. You find the country far to the right in this chart, which tells you that only very few countries in the world have such high average incomes. The fact that the average income is far higher than the poverty line tells us that the existing poverty in Denmark discussed at the beginning of this post is to a large extent the consequence of inequality.

What this chart makes very clear is how low the average incomes in many countries in the world are. The huge majority of the world live in countries where the average income is much lower than the poverty threshold in rich countries. 82% of the world population live in countries where the mean income is less than $20 per day.

And where incomes are low, living standards generally are poor . As the last chart below shows, a child that is born into a poorer country must not just expect to live on a very low income, but also faces a much higher risk of not staying alive at all.

As I have said before , people are not poor because of who they are, but because of where they are. This is why economic growth is so important to leave poverty behind. By far the most important difference between those people who are not living in poverty and those who do is the average income in the country that they live in – this single factor matters more for a person’s income than all other factors taken together . The increase of average income in a country is called economic growth and for global poverty to decrease substantially economic growth for the poorest billions of people is necessary.

→ See my previous article: The economies that are home to the poorest billions of people need to grow if we want global poverty to decline .

The future of global poverty

The world today is far from the ‘end of poverty’ relative to any poverty definition. After two centuries of unprecedented progress against the very worst poverty it is still the case that every tenth person lives on less than $1.90 per day .

As the world has not even ended extreme poverty it is therefore right to focus much of our attention on this very low poverty cutoff; ending extreme poverty surely is a global goal of great importance.

Yet at the same time we should consider what our aspirations for the future are. In the past our ancestors did not know that it was possible for a society to leave widespread poverty behind. Today we are in a different situation. We know from the reality of today’s rich countries that widespread poverty is not inevitable. Because we know that poverty relative to such higher cutoffs is not inevitable I believe it would be wrong to limit our ambitions to eradicating poverty based on the definition of poverty in the very poorest countries.

What I take away from this discussion are three insights: First, we have seen from countries like Denmark that it is possible to reduce poverty for an entire population relative to a poverty line of about $30 per day. Second, we have seen that these countries were extremely poor in the past and were able to reduce poverty over the course of the last few generations. And third we have seen that the huge majority of the world is still living in great poverty, by any standard. What this suggests to me is that the history of global poverty reduction has only just begun.

Continue reading Our World in Data : My colleague Hannah Ritchie has just published a series of posts on the drivers of deforestation and how to bring humanity's long history of deforestation to an end. You find her work here .

Note: The World Bank has updated its poverty and inequality data

The data in this article uses a previous release of the World Bank's poverty and inequality data in which incomes are expressed in 2011 international-$.

The World Bank has since updated its methods, and now measures incomes in 2017 international-$. As part of this change, the International Poverty Line used to measure extreme poverty has also been updated: from $1.90 (in 2011 prices) to $2.15 (in 2017 prices).

This has had little effect on our overall understanding of poverty and inequality around the world. But because of the change of units, many of the figures mentioned in this article will differ from the latest World Bank figures.

Read more about the World Bank's updated methodology:

• From $1.90 to $2.15 a day: the updated International Poverty Line
• Explore the latest World Bank data on poverty and inequality

Acknowledgements: I would like to thank Joe Hasell for his thoughtful comments on draft versions of this article.

Brønnum-Hansen H, Foverskov E, Andersen I. Income inequality in life expectancy and disability-free life expectancy in Denmark. J Epidemiol Community Health 2021;75:145-150. https://jech.bmj.com/content/75/2/145

For the moment it is important to note that this $30 per day poverty line is defined in international-$ and therefore comparable with the ‘International Poverty Line’ discussed in the following section. Much more details about how to compare incomes across countries, the income concept here, and the definition of this poverty line follows further below in this text.

Kate Raworth (2017) – A Doughnut for the Anthropocene: humanity's compass in the 21st century. In The Lancet Planetary Health. Volume 1, Issue 2, E48-E49, May 01, 2017. Open Access DOI: https://doi.org/10.1016/S2542-5196(17)30028-1 You find the metrics that the Doughnut relies on in the Appendix here .

Jason Hickel – Could you live on $1.90 a day? That's the international poverty line and here .

Allen, Robert C.(201). – Absolute Poverty: When Necessity Displaces Desire . American Economic Review, 107 (12): 3690-3721.DOI: 10.1257/aer.20161080

Lant Pritchett (2013) – Monitoring progress on poverty: the case for a high global poverty line. Online here https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/8440.pdf

Jolliffe and Prydz (2016)

Specifically, the line is set at the average national poverty line amongst 15 particular low-income countries. As Jolliffe and Prydz (2016) demonstrate however, this is also the average poverty line found among the poorest quarter of countries with available data, and also among countries falling into the World Bank’s low-income category.

The study on which these thresholds rely is Jolliffe, D., Prydz, E.B. Estimating international poverty lines from comparable national thresholds. J Econ Inequal 14, 185–198 (2016). https://doi.org/10.1007/s10888-016-9327-5 The researchers also report an average high-income country poverty line of $21.70 per day.

High income countries in the World Bank framework are however relatively poor compared to the countries that I’m focusing on here – the cutoff for a high-income country according to the World Bank is $12,536, about a quarter of the GNI of Germany and only a fifth of the US. Accordingly, the poverty cutoff is much lower than in those countries. Here you find the World Bank income classification cutoffs .

The range of incomes considered ‘middle’ and ‘high’ income countries according to the World Bank are very low relative to rich countries. High-income economies are those with a GNI per capita of $12,536 or more. The range of middle-income economies begins at a GNI per capita of $1,036. In this post I want to rely on countries like Denmark; higher income countries by any standard.

Martin Ravallion (2019) – On Measuring Global Poverty . NBER Working Paper 26211. DOI 10.3386/w26211

This is possible by relying on the work of the International Comparison Project , which monitors the prices of goods and services around the world.

Angus Deaton and Alan Heston (2010) discuss the methods behind such price adjustments and many of the difficulties and limitations involved.

Deaton, A., and Heston, A. 2010. “Understanding PPPs and PPP-Based National Accounts.” American Economic Journal: Macroeconomics 2 (4): 1–35. A working paper version is available online here .

Keep in mind that in the special case of the US the US-$ equals the international-$.

The European reference incomes are national median equivalised disposable income after social transfers.

The disposable household income including all income from work (employee wages and self-employment earnings), private income from investment and property, transfers between households, and all social transfers received in cash including old-age pensions.

Eurostat applies an equivalisation factor calculated according to the OECD-modified scale first proposed in 1994. The UN/World Bank is not.

This is according to Eurostat here , where you also find the relevant data. (If the link should break, search on Google for ‘Distribution of income by quantiles - EU-SILC and ECHP surveys’.)

There are various ways of bringing the national poverty lines with reference to the national median equivalised disposable income after social transfers in line with the income/expenditure concept used in PovcalNet.

Joliffe and Prydz follow a different approach and their paper is very relevant for anyone interested in this question here. One alternative to the approach I’m following in this article would be to start from the poverty lines they estimated (based on the poverty headcount ratio) and apply the growth rate of the median income since the publication of their study. Yet another possibility would of course be to repeat their analysis with the up-to-date data. I am not following either of these approaches because I believe for a wide audience they are less transparent that the approach here – which is simply: I rely on the same dataset so that I rely on the same income concept, then look up the median income and multiply it by 0.6.

This is the reference: Jolliffe & Prydz (2016). Estimating international poverty lines from comparable national thresholds. The Journal of Economic Inequality, 14(2), 185-198.

The following are the relevant calculations. All of them are based on PovcalNet data:

Germany’s median monthly income in 2017 was $1417.29 according to PovcalNet.

60% of the median expressed in daily income/consumption is 0.6*$1417.29=$850.374/30=$28.35 per day

Sweden’s median monthly income in 2017 was $1469 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*1469)/30=$29.38 per day

Norway’s median monthly income in 2017 was $1890 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*1890)/30=$37.8 per day

Austria’s median monthly income in 2017 was $1534 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*1534)/30=$30.68 per day

In the UK the median monthly income in 2017 was $1252 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*1252)/30=$25.04 per day

France’s median monthly income in 2017 was $1364 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*1364)/30=$27.28 per day

Switzerland’s median monthly income in 2017 was $1791 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*1791)/30=$35.82 per day

Spain’s median monthly income in 2017 was $982 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*982)/30=$19.64 per day

Iceland’s median monthly income in 2017 was $1582 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*1582)/30=$31.64 per day

Luxembourg’s median monthly income in 2017 was $2193 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*2193)/30=$43.86 per day

Netherland’s median monthly income in 2017 was $1430 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*1430)/30=$28.6 per day

Belgium’s median monthly income in 2017 was $1346 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*1346)/30=$26.92 per day

Denmark’s median monthly income in 2017 was $1453 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*1453)/30=$29.06 per day

Ireland’s median monthly income in 2017 was $1234 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*1234)/30=$24.68 per day

Finland’s median monthly income in 2017 was $1361 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*1361)/30=$27.22 per day

According to the " Annual Update of the HHS Poverty Guidelines " the poverty line in the US is an annual income of US$12,760. That is in 2020 price. According to the World Bank , the Consumer Price Index in the US in 2020 was 118.7 and in 2011 it was 103.2. So prices between the years rose by 118.7/103.2 - 1 =  15% .

Deflating the poverty line in to 2011 prices we get 12,760/1.15 = $11,096. And expressing that as a per day figure that is $11,096/365 = $30.40

This method was introduced by Jolliffe and Prydz (2016) and used by Jolliffe et al. (2022) as an ingredient of their method for setting the World Bank's international poverty lines.

Jolliffe, Dean, and Espen Beer Prydz. 2016. Estimating International Poverty Lines from Comparable National Thresholds . Washington, DC.

Jolliffe, Dean Mitchell, Daniel Gerszon Mahler, Christoph Lakner, Aziz Atamanov, and Samuel Kofi Tetteh Baah. 2022. Assessing the Impact of the 2017 PPPs on the International Poverty Line and Global Poverty. The World Bank. Available to read at the  World Bank here .

You can see our detailed calculations in this Google Colabs document .

The US median monthly income in 2017 was $1640 according to PovcalNet.

60% of the median expressed in daily income/consumption is (0.6*1640)/30=$32.8 per day

These reports are called ‘Armuts- und Reichtumsbericht der Bundesregierung’ online at armuts-und-reichtumsbericht.de

The latest survey was produced by aproxima and published in 2016. It is published as Wahrnehmung von Armut und Reichtum in Deutschland, Ergebnisse der repräsentativen Bevölkerungsbefragung „ARB-Survey 2015“ , Berlin: Bundesministerium für Arbeit und Soziales (Hrsg.).

The 2011 PPP conversion factor for private consumption (LCU per international $) for Germany in 2015 is 0.84 according to the World Bank here .

This means the perceived poverty threshold corresponds to €947/0.84=int.-$1,127.38 per month or int.-$37.58.

The 2011 PPP conversion factor for private consumption (LCU per international $) for Germany in 2017 is 0.83 according to the World Bank here .

This means the UBI corresponds to 1200/0.83=int.-$1,445.78 per month or int.-$48.19.

That’s €783/0.834=int.-$938.85 per month. Or int.-$938.85/30.5=int.- $30.78 per day.

Kahneman and Deaton (2010) – High income improves evaluation of life but not emotional well-being. Published in the Proceedings of the National Academy of Sciences. https://www.pnas.org/content/107/38/16489

Kahneman and Deaton analyze two different concepts self-reported satisfaction:

– Emotional well-being refers to the “emotional quality of an individual's everyday experience – the frequency and intensity of experiences of joy, stress, sadness, anger, and affection that make one's life pleasant or unpleasant.”

– Life evaluation refers to the thoughts that people have about their life when they think about it.

The authors find that higher incomes go together with higher self-reported life satisfaction in both metrics. What they emphasize is that at very high incomes this is not true anymore – emotional well-being does not increase over around $75,000. Evaluation of life however continues to increase even at incomes over $75,000.

The two previous ones were income/expenditure as determined in household surveys and equivalized disposable income after social transfers.

There is generally a gap between GDP per capita and the averages found in both income surveys and expenditure surveys. But the reasons for the gap are different depending on which we are comparing.

GDP includes many items that are typically not measured in household income surveys, such as an imputed rental value of owner-occupied housing, the retained earnings of firms and taxes on production such as VAT. The gap is even larger when GDP is compared to surveys of household consumption – the latter concept excluding both investment expenditure and government expenditure on public services such as education and health.

Other aggregates beyond GDP are available in the national accounts that are more comparable to the concepts applied in household income and consumption surveys. However, important differences still remain even here. For example, in addition to imputed rents, imputations for the value of certain financial services, such as bank accounts, are included in aggregate household consumption measured in national accounts, with no equivalent for these items recorded in the survey data. In many countries the consumption of ‘nonprofit institutions serving households’ (NPISH) is included as part of household consumption within national accounts, but not within household surveys.

On top of these conceptual differences are a range of mismeasurement problems that affect both sets of data. On this topic see Deaton (2005), and Pinkovskiy and Sala-i-Martin (2016).

Deaton, Angus. 2005. “Measuring Poverty in a Growing World (or Measuring Growth in a Poor World).” The Review of Economics and Statistics 87 (1): 1–1.

Pinkovskiy, Maxim, and Xavier Sala-i-Martin. 2016. “Lights, Camera… Income! Illuminating the Nation"

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5 Poverty Essays You Can Download For Free

Poverty is a complex issue. Researchers, legislators, and philosophers debate causes and consequences all the time, as well as solutions. To learn more about poverty, here are five essays you can access online for free:

Ending Global Poverty: Why Money Isn’t Enough – Lucy Page and Rohini Pande

In this essay, the authors lay out the argument that if extreme poverty is to end by 2030, it will take more than just economic growth and the distribution of resources. The solution is a shift in social and political institutions. States must be accountable to the needs of the poorest people and also have the ability to address the needs. Simply having more wealth isn’t enough, the authors say. By 2030, the world as a whole will probably be richer, but that doesn’t guarantee poverty will be non-existent. “Ending Global Poverty” was published in fall 2018 in the Journal of Economic Perspectives.

How Poverty Became A Crime In America – Peter Edelman

This essay in The Guardian is excerpted from Peter Edelman’s book Not A Crime To Be Poor: The Criminalization of Poverty in America. Edelman is an expert on poverty and known for resigning from the Clinton administration over welfare reforms he disagreed with. In his essay, Edelman describes how the US has created a system that punishes the poor, from budget cuts to mass incarceration to racism. Though short, the essay shrewdly explains the criminalization of poverty.

The Economic Lives Of The Poor – Abhijit V. Banerjee and Esther Duflo

Published in the Journal of Economic Perspectives in 2007, this essay explores the lives of the “extremely poor.” These are the people who live on less than $1 per day. Banerjee and Duflo describe the kinds of choices this group must make, their challenges, and more. They’ve relied on data and research from household surveys performed in 13 countries. If you’ve ever wondered what life is like for very poor people, how they earn their money, and how they spend it, this is a good essay to read.

The New Face of Hunger –  Tracie McMillan

Known for the New York Times bestseller The American Way of Eating, Tracie McMillan focuses her investigative research on poverty and food. In this essay from National Geographic, which includes pictures and graphs, McMillan follows the story of a woman living in Iowa. Money is very tight for this woman and her family, and feeding her children enough is often very challenging. In this essay, McMillan enlightens the reader on who is going hungry in America and the reasons why.

The Continuing Evolution of American Poverty and Its Implications for Community Development – Alan Berube

Written by a senior fellow at the Brookings Institution Metropolitan Policy Program in Washington D.C., this essay (published by Brookings in 2016) examines how poverty has changed in the last 40 years. Community development has also changed, which means where poverty is found and how it manifests is different than in years past. Where does community development fit into the fight against poverty? Berube addresses this question and more.

Read more essays on poverty !

Poverty Essay for Students and Children

500+ words essay on poverty essay.

“Poverty is the worst form of violence”. – Mahatma Gandhi.

How Poverty is Measured?

For measuring poverty United nations have devised two measures of poverty – Absolute & relative poverty.  Absolute poverty is used to measure poverty in developing countries like India. Relative poverty is used to measure poverty in developed countries like the USA. In absolute poverty, a line based on the minimum level of income has been created & is called a poverty line.  If per day income of a family is below this level, then it is poor or below the poverty line. If per day income of a family is above this level, then it is non-poor or above the poverty line. In India, the new poverty line is  Rs 32 in rural areas and Rs 47 in urban areas.

Get the huge list of more than 500 Essay Topics and Ideas

Causes of Poverty

According to the Noble prize winner South African leader, Nelson Mandela – “Poverty is not natural, it is manmade”. The above statement is true as the causes of poverty are generally man-made. There are various causes of poverty but the most important is population. Rising population is putting the burden on the resources & budget of countries. Governments are finding difficult to provide food, shelter & employment to the rising population.

The other causes are- lack of education, war, natural disaster, lack of employment, lack of infrastructure, political instability, etc. For instance- lack of employment opportunities makes a person jobless & he is not able to earn enough to fulfill the basic necessities of his family & becomes poor. Lack of education compels a person for less paying jobs & it makes him poorer. Lack of infrastructure means there are no industries, banks, etc. in a country resulting in lack of employment opportunities. Natural disasters like flood, earthquake also contribute to poverty.

In some countries, especially African countries like Somalia, a long period of civil war has made poverty widespread. This is because all the resources & money is being spent in war instead of public welfare. Countries like India, Pakistan, Bangladesh, etc. are prone to natural disasters like cyclone, etc. These disasters occur every year causing poverty to rise.

Ill Effects of Poverty

Poverty affects the life of a poor family. A poor person is not able to take proper food & nutrition &his capacity to work reduces. Reduced capacity to work further reduces his income, making him poorer. Children from poor family never get proper schooling & proper nutrition. They have to work to support their family & this destroys their childhood. Some of them may also involve in crimes like theft, murder, robbery, etc. A poor person remains uneducated & is forced to live under unhygienic conditions in slums. There are no proper sanitation & drinking water facility in slums & he falls ill often &  his health deteriorates. A poor person generally dies an early death. So, all social evils are related to poverty.

Government Schemes to Remove Poverty

The government of India also took several measures to eradicate poverty from India. Some of them are – creating employment opportunities , controlling population, etc. In India, about 60% of the population is still dependent on agriculture for its livelihood. Government has taken certain measures to promote agriculture in India. The government constructed certain dams & canals in our country to provide easy availability of water for irrigation. Government has also taken steps for the cheap availability of seeds & farming equipment to promote agriculture. Government is also promoting farming of cash crops like cotton, instead of food crops. In cities, the government is promoting industrialization to create more jobs. Government has also opened  ‘Ration shops’. Other measures include providing free & compulsory education for children up to 14 years of age, scholarship to deserving students from a poor background, providing subsidized houses to poor people, etc.

Poverty is a social evil, we can also contribute to control it. For example- we can simply donate old clothes to poor people, we can also sponsor the education of a poor child or we can utilize our free time by teaching poor students. Remember before wasting food, somebody is still sleeping hungry.

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1 (page 1) p. 1 Introduction

• Published: July 2018
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Poverty is a global issue. There are people in every country with a standard of living that is significantly lower than that of others. Nevertheless, the absolute number of people living in poverty has decreased since 1990, especially in the poorest countries in the world. Therefore, there is reason to hope that further poverty reduction can occur. The Introduction outlines the pervasiveness and trends in poverty around the world; the many different causes of poverty that embed themselves in social, political, economic, educational, and technological processes, which affect all of us from birth to death; and considers why poverty matters. Overall, the economy suffers if systematic public policy does not address poverty.

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The Top 9 Causes of Global Poverty

More than 10% of the world’s population lives in extreme poverty — but do you know why? We look at 9 of the top drivers of global poverty.

Picture it: you need to feed your family, travel to and from work, and get your child school supplies. But you only have $1.90 in your pocket. It seems like an impossible scenario. But for approximately  800 million people  in the world, it’s their reality. 11% of the world’s population is living in  extreme poverty , which is defined as surviving on only $1.90  a day .

As dire as those figures are, there is some good news: In 1990, 35% of the world (1.8 billion people) was living in extreme poverty — so we’ve made some huge strides. While many argue that we will never be able to truly get rid of poverty,  extreme  poverty can be eradicated. Unfortunately, there is no “magic bullet” solution, but if we want to get rid of extreme poverty, we must first understand its causes. Here, we look at some of the top causes of poverty around the world.

1. INADEQUATE ACCESS TO CLEAN WATER AND NUTRITIOUS FOOD

Currently, more than  2 billion people  don’t have access to clean water at home, while over  800 million  suffer from hunger. You might think that poverty causes hunger and prevents people from accessing clean water (and you would be right!), but hunger and water insecurity are also big reasons why people struggle to escape extreme poverty.

If a person doesn’t get enough food, they simply don’t have the strength and energy needed to work. Lack of access to food and clean water can also lead to preventable illnesses like diarrhea. And when people must travel far distances to clinics or spend what little money remains on medicine, it drains already vulnerable populations of money and assets, and can knock a family from poverty into extreme poverty.

Even if clean water sources are available, they’re often located far from poor, rural communities. This means that women and girls collectively spend some  200 million hours  every day walking long distances to fetch water. That’s precious time that could be used working or getting an education to help secure a job later in life.

2. LITTLE OR NO ACCESS TO LIVELIHOODS OR JOBS

This might seem a bit like a “no brainer.” Without a job or a way to make money, people will face poverty. But it’s easy to assume that if someone wants a job, they could have one. That just isn’t true, particularly in developing and rural parts of the world. Dwindling access to productive land (often due to conflict, overpopulation, or climate change), and overexploitation of resources like fish or minerals is putting increasing pressure on many traditional livelihoods. In the  Democratic Republic of Congo  (DRC) for example, most of the population lives in rural communities where natural resources have been plundered over centuries of colonialism — while conflict over land disputes has forced people from the land they relied upon for food and money. Now, more than half of the country lives in extreme poverty. While inconsistent work and low paying jobs can land a family in poverty, absolutely no work means that a family can’t get by without assistance.

3. CONFLICT

Conflict can cause poverty in several ways. Large scale, protracted violence that we see in places like Syria can grind society to a halt, destroy infrastructure, and cause people to flee, forcing families to sell or leave behind all their assets. In Syria, around  70% of the entire population  now lives below the poverty line — this in a country where extreme poverty was once very rare. Women often  bear the brunt of conflict : during periods of violence, female-headed households become very common. And because women often have difficulty getting well-paying work and are typically excluded from community decision-making, their families are particularly vulnerable.

But even small bouts of violence can have huge impacts on communities that are already struggling. For example, if farmers are worried about their crops being stolen, they won’t invest in planting. Women are particularly vulnerable in these kinds of conflicts, too, as they often become the targets of sexual violence while fetching water or working alone in the fields.

4. INEQUALITY

There are many different types of inequality in the world, from economic to social inequalities like gender, caste systems, or tribal affiliations. But no matter the inequality, it generally means the same thing: unequal or no access to the resources needed to keep or lift a family out of poverty.

Sometimes inequalities are obvious, but in other situations, it can be subtle — for example, the voices of certain people or groups might not be heard in community meetings, meaning they don’t get a say in important decisions. Regardless, these inequalities mean that the people affected don’t have the tools they desperately need to get ahead, and for already vulnerable families, this can mean the difference between being poor or living in extreme poverty.

5. POOR EDUCATION

Not every person without an education is living in extreme poverty. But most of the extremely poor don’t have an education. And why is that? There’s a lot of  barriers  stopping children from going to school. Many families can’t afford to send their children to school and need them to work. More still don’t see a benefit in  educating girls . Education is often referred to as the great equalizer, and that’s because education can open the door to jobs and other resources and skills that a family needs to not just survive but thrive. UNESCO estimates that  171 million people  could be lifted out of extreme poverty if they left school with basic reading skills. And, with even more education, world poverty could be cut  in half .

6. CLIMATE CHANGE

You might be stunned to learn that the World Bank estimates that  climate change  has the power to push more than  100 million people  into poverty over the next ten years. As it is, climate events like drought, flooding, and severe storms disproportionately impact communities already living in poverty. Why? Because many of the world’s poorest populations rely on farming or hunting and gathering to eat and earn a living. They often have only just enough food and assets to last through the next season, and not enough reserves to fall back on in the event of a poor harvest. So when natural disasters (including the widespread droughts caused by  El Niño ) leave millions of people without food, it pushes them further into poverty, and can make recovery even more difficult.

7. LACK OF INFRASTRUCTURE

Imagine that you have to go to work, or to the store, but there are no roads to get you there. Or heavy rains have flooded your route and made it impassable. What would you do then? A lack of infrastructure — from roads, bridges, and wells to cables for light, cell phones, and internet — can isolate communities living in rural areas. Living “ off the grid ” means the inability to go to school, work, or market to buy and sell goods. Traveling farther distances to access basic services not only takes time, it costs money, keeping families in poverty. Isolation limits opportunity, and without opportunity, many find it difficult, if not impossible, to escape extreme poverty.

8. LIMITED CAPACITY OF THE GOVERNMENT

Many people living in the United States are familiar with social welfare programs that people can access if they need healthcare or food assistance. But not every government can provide this type of help to its citizens — and without that safety net, there’s nothing to stop vulnerable families from backsliding further into extreme poverty if something goes wrong. Ineffective governments also contribute to several of the other causes of extreme poverty mentioned above, as they are unable to provide necessary infrastructure or ensure the safety and security of their citizens in the event of conflict.

9. LACK OF RESERVES

People living in poverty don’t have the means to weather the storms of life. So when there is a drought, or conflict, or illness, there is little money saved or assets on hand to help. In Ethiopia for example, repeated cycles of drought have caused harvest after harvest to fail, causing a widespread hunger crisis. To cope, families will pull their children from school, and sell off everything they own to eat. That can help a family make it through one bad season, but not another. For communities constantly facing climate extremes or prolonged conflict, the repeated shocks can send a family reeling into extreme poverty and prevent them from ever recovering.

This blog was originally published at www.concernusa.org

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Poverty and Inequality in the World, Essay Example

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Poverty and inequality are two matters at all times influencing one another. Undoubtedly, where there is poverty there is also inequality happening on a social level.  These two terms, applied when discussing society in its entirety, are utilized to describe how inequality on an economical level affects social statuses, making room for let us say lucky groups, the ones able to afford almost anything and the unlucky, those who can barely make it from one day to another. Thereof, these two terms describe the cause and effect of the economic system, however complex it might be.

The main actors included in this process are, actually, the people living in the society and, also, the system at work in the society, by means of which people can or cannot get advantage insofar as to make their lives better. The actors included in the inequality process are, therefore, people on the one hand and, on the other hand, the economic system active in a particular society. This is exactly why the matter could not be discussed generally, but applied to each country in part.

The main focus of each scholar is that of identifying the most efficient strategies by means of each poverty to be avoided and inequality disposed of. However, given the complexity of the problem and the variety of variables which influence it, my standpoint is that no general strategy can be found, no strategy which, if applied anywhere, could solve such a sensitive matter. More precisely, distinct solutions should be sought and applied, afterwards, in each country in part.  I do not ignore the fact that relevant insights could be derived from one country which could aid solve the problem in another country, but that is not, under no circumstance, enough. In other words, global citizenship philosophy should be understood as the point of departure for the struggle of highlighting the efficient solutions towards eliminating inequality in societies.

Thereof, the main question I wish to bring to debate is that of identifying whether it would be more relevant that a united team of researchers would study a corpus of distinct societies in order to put together a strategy which would help eliminate inequality or that the same team of researchers would study the same country and its society, irrespective of the other insights derived from distinct societies, with the same scope. This question parts from the discussions in ”Globalization. A very short introduction”, by Manferd B. Steger. This made me realize that such a scope implies a numerous of variables to be taken into consideration and, however, contextualization, especially at a time in which globalization is rapidly escalating.

Probably, the most important aspect of such a research consists of the capabilities of the specialists of identifying the exact characteristics of each society in part which would affect, in any way, the rise of inequality. The presupposition stands clear. Each society has characteristics that influence the economic process, some of which are the great historical moments it went through, the collective mentality, the political system, the social intake of the differences between people, from the ways in which one can go from one social status to another until the way in which women are being viewed in comparison to men. Thereof, the question I propose stands relevant from the point of view that the strategy which, for example, would be applicable in a society in which women are expected to be paid far less than men occupying the very same positions would not be efficient in a society in which women are already highly emancipated and are not expected to be stay-at-home mothers for a long period of time.

Steger, B. “Manfred. Globalization: A Very Short Introduction.”

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March 2024 global poverty update from the World Bank: first estimates of global poverty until 2022 from survey data

R. andres castaneda aguilar, carolina diaz-bonilla, christoph lakner, minh cong nguyen, martha viveros, samuel kofi tetteh baah.

Global poverty estimates were updated today on the Poverty and Inequality Platform (PIP).   As explained in more detail in the What’s New document, more than 100 new surveys were added to the PIP database, bringing the total number of surveys to more than 2,300. With more recent survey data, this March 2024 PIP update is the first to report a global poverty number for 2020-2022, the period of the COVID-19 pandemic. We estimate that COVID-19 increased extreme poverty in the world, as measured by the international poverty line of $2.15, from 8.9 percent in 2019 to 9.7 percent in 2020 (see Figure 1). This is the first increase in global poverty in decades. It is in line with earlier estimates of the COVID-19 impact which used limited survey data and GDP growth projections.  The global increase in extreme poverty in 2020 is driven by South Asia, where extreme poverty increased by 2.4 percentage points to 13 percent between 2019 and 2020. In Latin America and the Caribbean, however, extreme poverty continued to decline in 2020, which is driven by Brazil. This can be explained by the role of fiscal policy in mitigating the economic impacts of the COVID-19 shock . At a higher poverty line of $3.65 ( the poverty line more relevant for assessing poverty in lower-middle-income countries ), poverty also fell in Latin America and the Caribbean and in East Asia and the Pacific even in 2020. At $6.85 ( the poverty line more relevant for assessing poverty in upper-middle-income countries ), poverty also declined in 2020 in Europe and Central Asia and in advanced countries (“Other High Income”). Unfortunately, survey coverage during the post-2019 period is still limited in Sub-Saharan Africa and the Middle East and North Africa, so we cannot report poverty estimates beyond 2019 for these regions. 

Figure 1: Global and regional poverty estimates, 1990 - 2022

Following the widespread recession in 2020, economies around the world started to recover in 2021 and extreme poverty levels were lower than pre-pandemic levels in the more prosperous regions of the world by 2022 (East Asia and the Pacific, Latin America and the Caribbean, advanced countries, Europe and Central Asia, and South Asia). For the world, however, global poverty was still marginally above pre-pandemic levels by 2022, though on a declining trend.  The new estimates of extreme poverty in the world in the period 2020-2022 are quite similar to earlier projections.   An estimated 23 million more people were living in extreme poverty in 2022, compared to 2019. That extreme poverty levels were lower in 2022 relative to 2019 for more prosperous regions, but not for the world, suggests that the economic recovery from the pandemic was uneven and slower for Sub-Saharan Africa where more than half of the extreme poor live. The year 2022 also came with another global shock – Russia’s invasion of Ukraine, which contributed to rising inflation in low-, middle- and high-income countries. At the $3.65 and $6.85 poverty lines, the global poverty rate in 2022 are lower the levels recorded in 2019. This result is consistent with the recovery being faster in more prosperous regions, considering that Sub-Saharan Africa accounts for a smaller share of the global poor at these higher lines compared to the extreme poverty line. This March 2024 global poverty update from the World Bank incorporates updated CPI, national accounts and population data, and revises previously published global and regional estimates from 1981 to 2022. The methodology used for lining up regional and global poverty has also been revised, which leads to small changes. For more details, see the What’s New document. Figure 1 shows global and regional poverty trends at all three global absolute poverty lines of the World Bank (see the poverty series using 2011 PPPs here ). Table 1 summarizes the revisions to the regional and global poverty estimates between the September 2023 data vintage and the March 2024 data vintage for the 2019 reference year at all three poverty lines.

Table 1: Poverty estimates for reference year 2019, changes between the September 2023 and March 2024 PIP vintages

Given all the new data points and revisions to PIP data and methodology in this update, global extreme poverty in 2019 has been revised down marginally by 0.1 percentage points to 8.9 percent, resulting in a downward revision in the number of poor people from 701 to 689 million. The global reduction in the millions of extreme poor occurs despite an upward revision in Sub-Saharan Africa (14 million). The reduction is driven by Europe and Central Asia and the Middle East and North Africa, where new survey data have recently become available to replace extrapolations of very old surveys (the regional estimate for Middle East and North Africa cannot be shown since it does not meet the 50% population cut-off.) For example, new survey data for 2022 have been added for Syria and Uzbekistan, for which the latest surveys were 2003 in the previous vintage of the data. At $3.65 and $6.85, poverty rates have been revised down by 0.7 and 0.6 percentage points, representing a reduction in global poverty counts by 52 and 44 million, respectively. These downward revisions in global poverty estimates at these higher poverty thresholds are driven by Europe and Central Asia and South Asia. For more details on the March 2024 PIP update from the World Bank, see the What’s New document.

Would you like to be updated with the latest news on PIP? Register to our newsletter  here .

The authors gratefully acknowledge financial support from the UK Government through the Data and Evidence for Tackling Extreme Poverty (DEEP) Research Program.

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Senior Economist, Poverty and Equity Global Practice, World Bank

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Senior Data Scientist, Poverty and Equity Global Practice, World Bank

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Economist, Global Poverty and Inequality Data (GPID), Development Data Group, World Bank

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Essay on Poverty: Samples in 100, 200, 300 Words

• Updated on  
• Oct 14, 2023

Poverty is a deep-rooted problem that continues to affect a large portion of the world’s population today. It touches on several aspects of human life including but not limited to political, economic, and social elements. Even though there are several methods to escape poverty, still issues arise due to a lack of adequate unity among the country’s citizens. Here are some essays on poverty which will give you insights about this topic.

This Blog Includes:

Essay on poverty in 100 words, essay on poverty in 200 words, reasons behind poverty, world poverty conditions, role of ngos to eradicate poverty, what can be done by us.

Poverty is defined as a state of scarcity, and the lack of material possessions to such an extreme extent that people have difficulties in fulfilling their basic needs. Robert McNamara, a former World Bank President, states that extreme poverty is limited by illiteracy, malnutrition, disease, high infant mortality rate, squalid conditions of living, and low life expectancy.

In order to eradicate poverty in a country, strict measures need to be taken on all levels. The political system needs to address this issue with utmost sincerity and strategic implementation in such a way that it improves the lives of people, especially the ones living below the poverty line. 

Also Read: Speech on Made in India

Poverty is like a parasite that degrades its host and eventually causes a lot of damage to the host. It is basically the scarcity of basic needs that leads to an extremely degraded life and even low life expectancy. It includes a lack of food, shelter, medication, education, and other basic necessities. Poverty is a more serious circumstance where people are forced to starve. It can be caused by a variety of factors depending upon the country. 

Every country that is hit with pandemic diseases, experiences an increase in poverty rates. This is because of the fact that poor people are unable to receive adequate medical care and hence are unable to maintain their health. This renders the people powerless and even puts their liberty in jeopardy. This is because of the fact that poor people can become trapped in a vicious cycle of servitude. The condition of poverty is a distressing one that causes pain, despair, and grief in the lives of the ones it affects. 

This is also a negative scenario that prevents a child from attending basic education. It’s the lack of money that prevents people from living sufficiently. Also, it is the cause of more serious social concerns such as slavery, child labour, etc. Hence action is needed on the same with utmost sincerity. 

Essay on Poverty in 300 words

Poverty is a multifaceted concept that includes several aspects such as social aspects, political elements, economic aspects, etc. It is basically associated with undermining a variety of essential human attributes such as health, education, etc. Despite the growth and development of the economies of countries, poverty still exists in almost every one of them. 

There are several contributing reasons behind poverty in a nation. Some of them are mentioned below:-

• Lack of literacy among citizens
• Lack of Capital in the country
• Large families and a rapidly growing population
• Limited employment opportunities

There are even urban areas where the slum population is increasing. These are deprived of many basic amenities such as sanitation, drainage systems, and low-cost water supply, etc. 

According to UNICEF , around 22000 children lose their lives each day due to poverty. There are approximately 1.9 billion children in developing countries in the world and India is also among them. Out of these, approximately 640 million don’t have a proper shelter, 270 million are living without medical facilities, and approximately 400 million don’t have access to safe water. This worldwide situation is growing at a fast pace. 

The approaches by NGOs basically include helping the poor by providing various public services such as medical services etc.

They also play a major role in mobilizing the services recommended by the government. They have various approaches and strategies that directly help the poor in various ways.

We help in eradicating poverty by increasing employment opportunities.

Ensuring financial services and providing the same is another such measure that can be taken.

Recognizing social entrepreneurs as people of influence, conveying to them the seriousness of this situation, and then eventually making people aware of the same is another thing that can be done. 

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Writing an essay on poverty in 200 words requires you to describe various aspects of this topic such as what causes poverty, how it affects individuals and society as a whole, etc. The condition of poverty is a distressing one that causes pain, despair, and grief in the lives of the ones it affects.

An essay on poverty may be started as follows:- Poverty is a deep-rooted problem that continues to affect a large portion of the world’s population today. It touches on several aspects of human life including but not limited to political, economic, and social elements. Even though there are several methods to escape poverty, still issues arise due to a lack of adequate unity among the country’s citizens.

Poverty in 100 words: Poverty is defined as a state of scarcity, and the lack of material possessions to such an extreme extent that people have difficulties in fulfilling their basic needs. Robert McNamara, a former World Bank President, states that extreme poverty is limited by illiteracy, malnutrition, disease, high infant mortality rate, squalid conditions of living, and low life expectancy. In order to eradicate poverty in a country, strict measures need to be taken on all levels. The political system needs to address this issue with utmost sincerity and strategic implementation in such a way that it improves the lives of people, especially the ones living below the poverty line.

For more information on such interesting topics, visit our essay writing page and follow Leverage Edu .

Deepansh Gautam

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Essay on World Poverty

Students are often asked to write an essay on World Poverty in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on World Poverty

What is world poverty.

World poverty means that many people in different countries do not have enough money to buy what they need to live. They might not have enough food, a safe place to live, or access to doctors when they are sick. This is a big problem that affects millions of people around the world.

Why Does Poverty Happen?

Poverty happens for many reasons. Some countries have wars that make it hard for people to live safely. Others might not have good schools or jobs. Sometimes, the weather can destroy crops and leave people without food.

What Can We Do?

To help reduce poverty, people can donate money or time to organizations that help those in need. Governments can also work together to make policies that help people get jobs and education. By working together, we can make a big difference in fighting poverty around the world.

250 Words Essay on World Poverty

World poverty means when people in many parts of the world do not have enough money to buy things they need like food, clothes, and a place to live. It is a big problem that affects millions of people around the world. Some people are so poor that they cannot go to school or see a doctor when they are sick.

Causes of Poverty

There are many reasons why poverty exists. In some countries, there are not enough jobs for everyone. This means that parents cannot earn money to take care of their families. In other places, wars and natural disasters like floods and earthquakes destroy homes and farms, making it hard for people to make a living. Sometimes, the rules of a country make it difficult for poor people to get better jobs or education.

Effects of Poverty

Living in poverty is very hard. People who do not have enough money cannot buy enough food, which can make them very sick. Children might not be able to go to school, which means they cannot learn the skills they need to get good jobs when they grow up. This can make it hard for them to escape poverty.

How to Help

There are many ways to help fight poverty. Governments and organizations around the world are working to create jobs and provide education and healthcare to poor communities. People can also help by donating money or time to charities that support those in need.

In conclusion, world poverty is a big problem that needs everyone’s attention. By working together, we can help make the world a better place for everyone.

500 Words Essay on World Poverty

Understanding world poverty.

Many people around the world do not have enough money to buy food, clothes, or a house. This situation is called poverty. Poverty is a big problem in many countries. It means not having enough to live a healthy and comfortable life. Imagine not knowing where your next meal will come from or living in a place that is not safe or clean. This is a reality for a lot of people in the world.

Reasons Behind Poverty

There are many reasons why poverty exists. In some countries, there are not enough jobs for everyone. This means people cannot earn money to take care of their families. In other places, schools may not be good, so children cannot learn properly. When they grow up, it becomes hard for them to find good jobs. Sometimes, countries face big problems like wars or natural disasters. These events can destroy homes and businesses, making it even harder for people to make money.

Living in poverty is very tough. People who do not have enough money often cannot eat healthy food. This can make them sick. Children who grow up in poverty may not go to school. Without education, it is hard for them to change their situation when they become adults. Poverty can also make people feel alone and sad because they might think no one cares about them.

What Can Be Done?

Governments and organizations around the world are trying to help people who live in poverty. They give food, money, and other kinds of help. Schools and training programs are important too. They can teach people how to do different jobs. This way, they can earn money and take care of their families. Everyone can help fight poverty. Even small actions like donating clothes or volunteering can make a big difference in someone’s life.

Hope for the Future

Fighting poverty is not easy, but there is hope. Many people and groups are working hard to make things better. For example, some companies are building factories in poor areas. This creates jobs for the local people. Scientists and doctors are also helping by finding ways to keep people healthy, even if they do not have a lot of money.

In conclusion, poverty is a big problem that affects millions of people around the world. It is caused by many factors and has serious effects on people’s lives. But there is hope. With the right help and opportunities, people can overcome poverty. It is important for everyone to know about poverty and think about how they can help. By working together, we can make the world a better place for everyone.

That’s it! I hope the essay helped you.

If you’re looking for more, here are essays on other interesting topics:

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Sri Lanka's Economy Shows Signs of Stabilization, but Poverty to Remain Elevated

COLOMBO, April 2, 2024 —Sri Lanka’s economy is projected to see moderate growth of 2.2% in 2024, showing signs of stabilization, following the severe economic downturn of 2022. But, the country still faces elevated poverty levels, income inequality, and labor market concerns, says the World Bank's latest bi-annual update.

Released today, the Sri Lanka Development Update, Bridge to Recovery, highlights that Sri Lanka saw declining inflation, higher revenues on the back of the implementation of new fiscal policies, and a current account surplus for the first time in nearly five decades, buoyed by increased remittances and a rebound in tourism.

However, poverty rates continued to rise for the fourth year in a row, with an estimated 25.9% of Sri Lankans living below the poverty line in 2023. Labor force participation has also seen a decline, particularly among women and in urban areas, exacerbated by the closure of micro, small, and medium-sized enterprises (MSMEs). Households are grappling with multiple pressures from high prices, income losses, and under employment. This has led to households taking on debt to meet food requirements and maintain spending on health and education.

“Sri Lanka’s economy is on the road to recovery, but sustained efforts to mitigate the impact of the economic crisis on the poor and vulnerable are critical, alongside a continuation of the path of robust and credible structural reforms,” emphasized Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal and Sri Lanka . “This involves a two-pronged strategy: first, to maintain reforms that contribute to macroeconomic stability and second, to accelerate reforms to stimulate private investment and capital inflows, which are crucial for economic growth and poverty reduction.”

Looking forward, the report projects a modest pickup in growth of 2.5% in 2025, with a gradual increase in inflation and a small current account surplus. However, high debt service obligations are expected to exert pressure on fiscal balances. Poverty rates are anticipated to remain above 22% until 2026. Risks to the outlook remain, particularly related to inadequate debt restructuring, reversal of reforms, financial sector vulnerabilities, and the enduring impact of the crisis. The report emphasizes that strong reform implementation will be fundamental to fostering a resilient economy through continued macro-fiscal-financial stability, greater private sector investment, and addressing risks associated with state-owned enterprises.

The Sri Lanka Development Update  is a companion piece to the  South Asia Development Update ,  a twice-a-year World Bank report that examines economic developments and prospects in the South Asia region and analyzes policy challenges faced by countries. The April 2024 edition, Jobs for Resilience , projects South Asia to remain the fastest-growing region in the world, with growth projected to be 6.0% in 2024- driven mainly by robust growth in India and recoveries in Pakistan and Sri Lanka. But this strong outlook is deceptive, says the report. For most countries, growth is still below pre-pandemic levels and is reliant on public spending. At the same time, private investment growth has slowed sharply in all South Asian countries and the region is not creating enough jobs to keep pace with its rapidly increasing working-age population. The report recommends a range of policies to spur firm growth and boost employment as well as help lift growth and productivity and free up space for public investments in climate adaptation.

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.

Notes: e = estimate, f = forecast.

(a)    Components of GDP by expenditure for 2020-2022 are estimates, as the data published on March 15, 2024, by authorities only included GDP by production.

(b)    Calculations based on SAR-POV harmonization, using 2019-HIES. Actual data: 2019. Microsimulation that models sectoral GDP growth rates, inflation, remittances, employment, and cash transfers 2020-2022. Nowcast and forecast (2023-2026) use nominal GDP growth rates by sector and CPI inflation.

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World Economic Situation and Prospects: April 2024 Briefing, No. 180

Debt Sustainability Challenges in Africa: The Role of Domestic Debt

In 2024, more low-income countries are facing debt distress or are at risk of debt distress than ever before. According to the latest IMF low-income countries debt sustainability analysis, 10 countries are in debt distress, while 52 countries are at moderate or high risk of debt distress. Out of these 62 countries, 40 are in Africa. African countries have suffered gravely from global shocks such as the COVID-19 pandemic, the war in Ukraine and spillover effects of high interest rates in many developed countries, which have increased debt levels across the continent. Debt levels are particularly high in the continent’s larger lower middle-income economies, including Egypt at 92 per cent of GDP, Angola at 84.9 per cent, and Kenya at 70.2 per cent.

Whether debt is external or domestic can be assessed along three criteria: currency of issuance, the governing jurisdiction, or residence of debt holders. Domestic debt can therefore be described as debt which is issued in the sovereign’s local currency, or debt which is governed by the domestic sovereign laws. It can also be defined as debt which is held by residents of the issuing sovereign.

Most African countries have historically relied on external debt in the form of long-term concessional financing from multilateral and bilateral lenders, or non-concessional private finance. However, in efforts to diversify financing sources and reduce risks of external debt vulnerabilities, many countries have increasingly turned towards domestic debt markets over the past two decades, reflecting a trend seen more broadly across developing countries. In emerging markets and developing economies, on average, domestic debt made up approximately 58 per cent of debt in 2022 and accounted for approximately 66 per cent of government debt accumulation since 2010.

Domestic debt has, however, presented a new set of challenges on debt sustainability. The S&P Global Africa Domestic Debt Vulnerability Index ranks Egypt, Ghana, Kenya, Mozambique, Angola and Zambia among the most vulnerable countries as of 2023. Due to limits in data availability, subsequent data analysis in the brief will focus largely on these countries. Figure 1 shows the total public debt in selected countries, with the corresponding share of domestic debt. Figure 2 shows the trend in domestic debt accumulation in the selected countries.

Potential benefits derived from domestic debt in Africa

Most of the domestic debt in Africa is denominated in local currencies and is therefore shielded from exchange rate volatility and currency mismatches. Since 2022, a number of African currencies recorded significant depreciation against the US dollar as shown in figure 3. Currency depreciation leads to an increase in foreign currency-denominated external debt. In Kenya for instance, as of December 2023, external debt – 67.3 per cent of which was dollar denominated – increased by $1.3 billion owing in part to depreciation of the Kenyan shilling. As well, approximately 98 per cent of Ghana’s external debt stock growth in 2023 was a result of the cedi’s depreciation against the dollar. Nigeria’s external debt in 2023 also increased by 100.1 per cent over a year because of the naira’s depreciation. Avoiding sharp and unexpected depreciation of domestic currencies can ensure that governments maintain predictability on domestic debt stock and movements. In addition to this, issuance of debt in domestic currency grants central banks and governments flexibility to employ monetary policy tools in domestic debt management.

Domestic debt defaults tend to be rarer than external debt defaults

This could be because policymakers have the option of inflating away domestic debt than recourse to outright default (Herman, Ocampo, and Spiegel, 2012). Also, in countries where domestic financial institutions are the main holders of government domestic debt, effects of a domestic debt default could be severe, and if not properly managed, could result in a widespread financial crisis. In the case of debt default, domestic debt tends to be easier to restructure since it is subject to the jurisdiction of domestic courts. A case study conducted by the IMF on debt restructurings between 1988 and 2020 concluded that domestic debt restructuring took considerably less time to complete compared to external debt restructuring, largely due to a greater sovereign control of the terms and laws governing domestic debt. Additionally, by restructuring domestic debt, countries can avoid the reputational costs associated with external debt restructuring and, in some cases, maintain access to external finance.

Risks associated with domestic debt

Increased reliance on domestic debt, even with the benefits outlined above, carries risks, which if not well managed, could be detrimental to economic growth. One of the key arguments against domestic debt is that it can entail significant crowding-out effects for the domestic private sector. When government is the largest borrower, credit from banking and non-banking financial institutions available to the private sector could diminish (Bua, Pradelli and Presbitero, 2014). Arnone and Presbitero (2010), note that domestic public debt might undermine economic activity through crowding out effects and inflationary pressures if it represents a large share of bank deposits. In Egypt, as of October 2023, domestic public debt was approximately 77 per cent of total domestic credit. In Kenya, as of 2022, exposure of financial institutions to government securities was approximately 40 per cent of the total deposits. As a result, private sector is more credit constrained than the public sector in many African countries. This in turn curtails the private sector’s growth potential since reduced private credit discourages investments into the private sector. Ultimately, crowding out can affect government revenue in the long run if the private sector taxable base grows at a subpar pace, which could in turn hamper the government’s ability to repay its debts. Banks may also find it challenging to adequately diversify their risks, if the high cost of capital leaves a preponderance of more risky projects seeking finance.

Another considerable challenge is the maturity structure of domestic debt instruments. Many developing countries are unable to issue long-term government instruments at reasonable interest rates, in turn issuing mainly short- and medium-term securities (0–9 years). As of 2022, Zambia and Kenya’s domestic debt portfolio comprised of 78.5 per cent and 77.8 per cent of short- and medium-term securities, respectively. The proportion was even higher in Ghana, where short- and medium-term securities accounted for approximately 89.8 per cent of marketable instruments at the end of 2022. This short-term maturity structure increases rollover risks, where governments continually borrow to settle maturing obligations, thus risking macroeconomic instability.

High domestic debt service burdens in some African countries weigh heavily on government finances, further reducing spending which could be directed to investments in critical sectors such as health, education, and infrastructure. Figure 5 compares domestic and external debt service payments in selected African countries in 2022. In this time period, in all the countries below, domestic debt service was higher than external debt service, despite domestic debt stock being lower than external debt stock. Mozambique, for instance, paid 5.5 per cent of GDP in service for domestic debt, which was a quarter of total debt stock, compared to 3.1 per cent of GDP for external debt which made up three quarters of the debt stock. Even more alarming, in 2022, Kenya, Uganda and Zambia spent lower on education than they did on domestic debt service, at approximately 4 per cent, 2.5 per cent and 3.5 per cent of GDP respectively.

In principle, policymakers could lower the cost of domestic debt servicing by inflating away the debt. In such cases, governments may adopt expansionary monetary policies to increase inflation thus effectively lowering the real value of its debt. While this might have some short-term benefits, in the long-term, high inflation may reduce investors’ confidence, increase cost of borrowing through an inflation-risk premium, and affect the long-term performance of the economy.

In some African countries, average real interest rates on domestic debt tend to be higher than nominal interest rate on external debt. This is, however, not always the case because of high inflation in many countries. According to the IMF, the projected average real interest rate on domestic debt for Ghana and Zambia over the period 2023–2032 will be lower than the nominal interest rate on external debt. Figure 6 shows the 10-year Government bond yield in selected countries, with Kenya and Nigeria above 18 per cent as of March 2024. This high yield spread, compared to the US 10-year Government bond yield at 4.21 per cent, illustrates the high-risk perception of many African sovereign debt instruments. Market sentiments, including preference of short-term maturities, as well as a narrow investor base, are some of the factors that could drive up the interest rate on domestic debt.

Implications of domestic debt restructuring on the financial sector and broader economy: Ghana’s experience Ghana’s debt default (external and domestic) and the subsequent restructuring has put the spotlight on domestic debt in Africa. The country’s public debt has steadily risen in the last decade, from 55.4 per cent of GDP in 2015 to 76.6 per cent in 2021. This trend was driven by Ghana’s access to the international financial markets, having had 15 outstanding Eurobonds at end-2022. In the same time period, domestic debt grew from 22.4 per cent of GDP to approximately 39.6 per cent of GDP mainly because of government borrowing to finance the energy sector and to bail out the finance sector following the 2018–2019 financial crisis. The COVID-19 related expenditure also increased debt by approximately 4.6 per cent of GDP in 2020.

At the time of default in December 2022, total public debt stood at 92.3 per cent of GDP. Some of the factors contributing to the default included an inflated import bill due to effects of the war in Ukraine, drastic depreciation of the cedi and increased cost of debt service. At the same time, external shocks triggered significant capital outflows and diminished access to international financial markets. Moody’s and Fitch downgraded the country’s sovereign credit rating in September 2022, and foreign exchange reserves dwindled to 2.7 months of import cover at end-December 2022, down from 4.3 months at end-December 2021.

In December 2022 the Government initiated a domestic debt exchange programme, aimed at restoring sound public finance management and debt sustainability. Domestic bond holders were offered a chance to exchange their holdings with a fresh issuance of bonds with longer average maturities and lower coupon rates. New bonds were issued at a coupon rate staggered between 0 and 10 per cent. Before the exchange, interest rates for 2–6 years notes ranged between 21.5 per cent and 29.85 per cent. Although the programme managed to lower interest rates on government securities and lengthen their maturities, analysis by the country’s financial sector regulators showed that it adversely affected the solvency of some banks and insurance companies. The Government formed the Ghana Financial Stability Fund to minimize impacts of the restructuring process to the financial sector, and to avoid risks of a potential financial crisis. The IMF demanded satisfactory completion of the domestic debt exchange programme as a prerequisite for continued engagement with external creditors. The restructuring also took a relatively short time, with the domestic debt exchange programme concluding successfully in 2023. In January 2024, Ghana reached an agreement with official creditors under the G20 Common Framework on Debt Treatment.

Some lessons can be derived from Ghana’s experience with the domestic debt restructuring. These include the need to cushion the financial sector from adverse impacts of a domestic debt default. Importantly, countries should also focus on safeguarding vulnerable people by improving social protection in times of economic hardships. In 2023 Ghana doubled benefits distributed through the cash transfer programme targeting people living in poverty. The Government also increased allocations in the education and health sector. Through this experience, Ghana has maintained a growth momentum buttressed by sound financial and monetary policies aimed at restoring macroeconomic stability and debt sustainability. Inflation declined from 54.2 per cent in December 2022 to 23.2 per cent in February 2024. The economy also grew at an average of 2.8 per cent in the first three quarters of 2023, almost double the Government’s initial target of 1.5 per cent GDP growth. In January 2024, the IMF noted that “ambitious structural fiscal reforms are bolstering domestic revenues, improving spending efficiency, strengthening public financial and debt management, preserving financial sector stability, enhancing governance and transparency, and helping create an environment more conducive to private sector investment.”

How can African countries better access and manage their domestic debt?

Domestic debt is a valuable source of finance for African countries. However, it remains a potential source of vulnerability and the consequences of a default on domestic debt can quickly reverberate throughout the economy. The viability of domestic debt will continue to be challenged by short-term maturity preference, limited – or financial sector concentrated – investor base and high interest rates. If these challenges persist, governments will continue to struggle to meet debt repayment obligations and thus worsening debt sustainability.

African countries need to improve macroeconomic policies, debt management and regulatory frameworks to ensure long term sustainability of domestic debt. Firstly, a stable macroeconomic environment, especially a low and stable inflation rate, is necessary to build investor confidence and appetite in medium- and long-term government debt instruments. In addition, a broad investor base, including non-financial institutional investors is also required to reduce the risk of a private credit crunch caused by overexposure of financial institutions to government lending. This will also accelerate development of domestic bond markets, in turn improving resilience to global shocks by reducing reliance on external borrowing. Finally, and most importantly, proceeds from debt must be used productively – by investing in projects with high economic returns – to ensure governments’ ability to sustainably service their debt obligations.

Going forward, as African governments continue to seek an optimal debt structure, they will need to strengthen their debt sustainability frameworks to adequately balance the trade-offs associated with domestic debt. Lack of timely action on this will only exacerbate existing debt vulnerabilities, which could negate development progress and put the SDGs even further out of reach for countries most in need.

The Monthly Briefing on the World Economic Situation and Prospect is part of the monitoring and analysis activities of the Global Economic Monitoring Branch (GEMB) in the Economic Analysis and Policy Division (EAPD) of UN DESA. This issue was prepared by Nelly Rita Muriuki under the supervision of Hamid Rashid (Chief, GEMB) and general guidance of Shantanu Mukherjee (Director, EAPD).

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Poor Nations Are Writing a New Handbook for Getting Rich

Economies focused on exports have lifted millions out of poverty, but epochal changes in trade, supply chains and technology are making it a lot harder.

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By Patricia Cohen

Reporting from London

For more than half a century, the handbook for how developing countries can grow rich hasn’t changed much: Move subsistence farmers into manufacturing jobs, and then sell what they produce to the rest of the world.

The recipe — customized in varying ways by Hong Kong, Singapore, South Korea, Taiwan and China — has produced the most potent engine the world has ever known for generating economic growth. It has helped lift hundreds of millions of people out of poverty, create jobs and raise standards of living.

The Asian Tigers and China succeeded by combining vast pools of cheap labor with access to international know-how and financing, and buyers that reached from Kalamazoo to Kuala Lumpur. Governments provided the scaffolding: They built up roads and schools, offered business-friendly rules and incentives, developed capable administrative institutions and nurtured incipient industries.

But technology is advancing, supply chains are shifting, and political tensions are reshaping trade patterns. And with that, doubts are growing about whether industrialization can still deliver the miracle growth it once did. For developing countries, which contain 85 percent of the globe’s population — 6.8 billion people — the implications are profound.

Today, manufacturing accounts for a smaller share of the world’s output, and China already does more than a third of it . At the same time, more emerging countries are selling inexpensive goods abroad, increasing competition. There are not as many gains to be squeezed out: Not everyone can be a net exporter or offer the world’s lowest wages and overhead.

There are doubts that industrialization can create the game-changing benefits it did in the past. Factories today tend to rely more on automated technology and less on cheapworkers who have little training.

“You cannot generate enough jobs for the vast majority of workers who are not very educated,” said Dani Rodrik, a leading development economist at Harvard.

The process can be seen in Bangladesh, which the World Bank’s managing director called “one of the world’s greatest development stories” last year. The country built its success on turning farmers into textile workers.

Last year, though, Rubana Huq, chair of Mohammadi Group, a family-owned conglomerate, replaced 3,000 employees with automated jacquard machines to do complex weaving patterns.

The women found similar jobs elsewhere in the company. “But what follows when this happens on a large scale?” asked Ms. Huq, who is also president of the Bangladesh Garment Manufacturers and Exporters Association.

These workers don’t have training, she said. “They’re not going to turn into coders overnight.”

Recent global developments have accelerated the transition.

Supply chain meltdowns related to the Covid-19 pandemic and to sanctions prompted by Russia’s invasion of Ukraine drove up the price of essentials like food and fuel, biting into incomes. High interest rates, imposed by central banks to quell inflation, set off another series of crises: Developing nations’ debts ballooned , and investment capital dried up.

Last week, the International Monetary Fund warned of the noxious combination of lower growth and higher debt.

The supercharged globalization that had encouraged companies to buy and sell in every spot around the planet has also been shifting. Rising political tensions, especially between China and the United States, are affecting where businesses and governments invest and trade.

Companies want supply chains to be secure as well as cheap, and they are looking at neighbors or political allies to provide them.

In this new era, Mr. Rodrik said, “the industrialization model — which practically every country that has become rich has relied on — is no longer capable of generating rapid and sustained economic growth.”

Nor is it clear what might replace it.

There’s a future in service jobs.

One alternative might be found in Bengaluru, a high-tech center in the Indian state of Karnataka.

Multinationals like Goldman Sachs, Victoria’s Secret and the Economist magazine have flocked to the city and set up hundreds of operational hubs — known as global capability centers — to handle accounting, design products, develop cybersecurity systems and artificial intelligence, and more.

Such centers are expected to generate 500,000 jobs nationwide in the next two to three years, according to the consulting firm Deloitte .

They are joining hundreds of biotech, engineering and information technology companies including homegrown giants like Tata Consultancy Services, Wipro and Infosys Limited. Four months ago, the American chip company AMD unveiled its largest global design center there.

“We have to move away from the idea of classic development stages, that you go from the farm to the factory and then from the factory to offices,” said Richard Baldwin , an economist at the IMD in Lausanne. “That whole development model is wrong.”

Two-thirds of the world’s output now comes from the service sector — a mishmash that includes dog walkers, manicurists, food preparers, cleaners and drivers, as well as highly trained chip designers, graphic artists, nurses, engineers and accountants.

It is possible to leapfrog to the service sector and grow by selling to businesses around the world, Mr. Baldwin argued. That is what helped India become the world’s fifth-largest economy .

In Bengaluru, formerly known as Bangalore, a general rise in middle-class living attracted more people and more businesses that, in turn, attracted more people and businesses, continuing the cycle, Mr. Baldwin explained.

Covid sped this transition, by forcing people to work remotely — from a different part of town, a different city or a different country.

In the new model, countries can focus growth around cities rather than a particular industry. “That creates economic activities which are fairly diverse,” Mr. Baldwin said.

“Think Bangalore, not South China,” he said.

Free markets are not enough.

Many developing nations remain focused on building export-oriented industries as the path to prosperity. And that’s how it should be, said Justin Yifu Lin , dean of the Institute of New Structural Economics at Peking University.

Pessimism about the classic development formula, he said, has been fueled by a misguided belief that the growth process was automatic: Just clear the way for the free market and the rest will take care of itself.

Countries were often pressured by the United States and the international institutions to embrace open markets and hands-off governance.

Export-led growth in Africa and Latin America stumbled because governments failed to protect and subsidize infant industries, said Mr. Lin, a former chief economist at the World Bank.

“Industrial policy was taboo for a long time,” he said, and many of those who tried failed. But there were also success stories like China and South Korea.

“You need the state to help the private sector overcome market failures,” he said. “You cannot do it without industrial policy.”

It won’t work without education.

The overriding question is whether anything — services or manufacturing — can generate the type of growth that is desperately needed: broad based, large scale and sustainable.

Service jobs for businesses are multiplying, but many offering middle and high incomes are in areas like finance and tech, which tend to require advanced skills and education levels far above what most people in developing nations have.

In India, nearly half of college graduates don’t have the skills they need for these jobs, according to Wheebox , an educational testing service.

The mismatch is everywhere. The Future of Jobs report , published last year by the World Economic Forum, found that six in 10 workers will need retraining in the next three years, but the overwhelming majority won’t have access to it.

Other kinds of service jobs are proliferating, too, but many are neither well paid nor exportable. A barber in Bengaluru can’t cut your hair if you’re in Brooklyn.

That could mean smaller — and more uneven — growth.

Researchers at Yale University found that in India and several countries in sub-Saharan Africa, agricultural workers jumped into consumer service jobs and raised their productivity and incomes.

But there was a catch: The gains were “strikingly unequal” and disproportionately benefited the rich .

With a weakening global economy , developing countries will need to wring every bit of growth they can from every corner of their economies. Industrial policy is essential, Mr. Rodrik of Harvard said, but it should focus on smaller service firms and households because that is going to be the source of most future growth.

He and others caution that even so, gains are likely to be modest and hard won.

“The envelope has shrunk,” he said. “How much growth we can get is definitely less than in the past.”

An earlier version of this article misidentified the location of IMD. It is in Lausanne, not Geneva.

How we handle corrections

Patricia Cohen writes about global economics and is based in London. More about Patricia Cohen

Poverty in the World Report

Introduction, the situation of poverty in the world, causes of poverty, efforts to fight poverty.

Poverty is described as a condition where an individual or individuals are not access to basic needs. When the term poverty runs into the minds of many people, they picture lack of food. Food is one of the main basic necessities that make people toil day and night. Poverty may differ from one person to the other and especially if it is measured in terms of what people consider as basic needs. As much as people who are having some sought of shelter and food for their day many consider themselves poor, there are others who live a day at a time. They do not have a shelter and mainly live in the streets hoping that someone will drop something their way. They care less about their clothing and shelter and only wish they could get some food for their stomachs. Food being the main reference to the extremes of poverty, it comes with it many other situations that that are related to their conditions. One of such issues is health which has a lot to do with what someone is eating and where they are staying. Places that are hard hit with poverty will also report a lot of cases of ill health due to poor leaving conditions. Other issues that are related to poverty include overpopulation, immorality and other criminal offences. In this paper, we will be looking at the situation of poverty in the world, its causes and the efforts of the international organizations to manage the same (Seabrook, p. 78).

The rate and extreme of poverty differs from one nation to the other. All this has a lot to do with the growth domestic product of the nation. Poverty in developing nations is different from that in developed nations. Despite this difference, it can not be denied that every nation and society has a group of people who can not manage their daily basic needs. The causes of such poverty vary from individual to individual. Extreme poverty was being experienced before industrial revolution due to high levels of illiteracy. It was hoped that after industrialization, the problem will be solved greatly. Even though a lot has happened since then, poverty remains to be a crisis that takes a different shape even with modernization. Improvements in the field of technology are also making some people that would have otherwise been considered to be well off to be lacking in a way. The world is growing at a very faster rate and requires people to have something extra that will enable them manage the changes. For instance, in the past, being without shoes was considered to be poverty, but as shoes flood the market, it is now illiteracy that is considered as poverty. This is the main reason why poverty shall remain to be a permanent crisis that is likely to increase with improvements in technology.

Poverty has hindered especially many developing nations from achieving their goals and targets. There is so much exploitation especially by the leaders who take advantage of the situations that their people are into. Most African nations that have records of extreme poverty are also having poor leaders who are doing little to deliver their nations from the pain of poverty. What happens is that they get so much exited about their leadership positions that they forget what they promised their people. All over a sudden they find that they have so much at their disposal and feel that it is their time to make themselves rich. There is a general fear especially among political leaders that they may go back to their former status if they don’t make good use of their political positions. They will hence ensure that they pump a lot of wealth into their accounts and make investments with the hope that even if they are not considered back, they will have enough for the coming years. Their remunerations may not always be enough for them to make such investments and will hence steal into the government coffers. The generated income that is usually supposed to improve the status of the people ends up in the pockets of greedy and selfish leaders (Kerbo, p. 97).

Poverty may be caused by a number of situations which differ with the environment and society. Poverty may be an unpredictable situation that may happen to a person unexpectedly. There may hence be two major cause of poverty, one that may be predictable and the other unpredictable. Some of the predictable causes of poverty may be illiteracy where by an individuals lacks the knowledge of earning a living and hence subjecting themselves to a lifetime of need. There are also cultural and religious believes that make certain categories of people to be poor. For instance some religious groups of people believe that lack of certain basic needs is a way of pledging allegiance to their gods. They will live a poor life by choice as a sign of showing, commitment to their faith. Other cultural beliefs subject people to poverty due to how they are looked at and their ways of living. For instance in some Asian communities, they believe in caste system where by some people are not supposed to own wealth. They can not be given some official duties to do despite their academic qualifications. They are also not allowed to venture into investments even if they manage to save enough (Myrdal, p. 86).

People may also find themselves into poverty due to other unpredictable situations such as accidents, wars or lose of their dependant. Accidents may render certain productive people of the society unproductive. That may either be paralyzed, have brain and spinal injuries, loose their limbs and legs and hence not being able to do what they used to do. A loss in any vital section of the body can affect an individually psychologically and mentally and hence leaving them at the mercies of other people. Such people, unless they get the support of their relatives, may end up borrowing to meet their daily needs. Outbreak of war and violence may also make a dependent person to be poor. This is due to some of the situations that may come with such wars. Apart from destruction of property, other people may be displaced from their areas of locations. They will hence have to begin their lives a fresh which may not be easy to adjust. The pains of their situation many persist as long as there is still turmoil around them. This may be the most devastating time of their lives considering the means through which they found themselves poor (Bacci & Santis, p. 43).

Another cause of poverty especially in the modern world is the changes in the field of information technology. The world has mainly become a place of the swift and those who can adjust to the changes faster. People are adapting more sophisticated means of living which is leaving those with average facilities to feel out of place. Everything has become too technological that no one can live without it. There are no options for average facilities as business organizations adjust to manage competition. For most of the poor people that intensified their efforts to make their lives better still find themselves in similar situations as developments are made. What they are now having which they can be proud of as a development, is what was being used by the rich probably five years ago. They may hence look at their own capacity and feel that they have advanced, but when a comparison is made with their richer counterparts, they realize that they still have along way to go. Due to such improvements, poverty may hence not be considered as an improvement in the living standards but rather the gap that distinguishes the rich from the rest. As long as such a strategy continuous to be used, poverty shall remain to be a lifetime battle (Kaul & Moschovitis, p. 98).

Poverty is not only a national issue but has been considered to affect the world economy. This is the basic reason why the international community is employing a lot of efforts to ensure that the situation is solved. Poverty is being fought at all levels of society that includes the community, district, national and international level. It is hoped that despite the challenges that people are going through, poverty will be minimized. Some of the tireless efforts that are considered to have an impact if they succeed are to educate communities about creating wealth and managing it. This is especially in societies and people that believe that they were born to be poor. It is however very difficult to convince an individual or society that is inclined to religious and cultural beliefs to change their ways. It takes a lot of effort to empower such individuals and let them know that they can still pay allegiance to their beliefs. There is a need for the communities to wake up from past beliefs and brace up for the changes happening around. As inevitable as change is, some communities and individuals have resisted it and hence making them to wallow in more poverty.

Education is playing a vital role in informing the masses on the various options available for them to create wealth. This has seen people improve from their traditional and cultural inclination which was the main cause of poverty and adapting modern means of survival. Education has been made compulsory in most nations as support is granted especially to children to adapt basic education. Most countries have initiated free primary education especially to the parents of children that can not afford it. This is one of the practical strategies that have recorded a lot of improvements in developing nations. Parents are also being encouraged to take their children to school despite the contributions that have to earn a living. The implementation of free primary education in most developing nations was hindered by the fact that parents make their children to work and not allow them to go to school. Such a challenge has been fought by making child labour to be a criminal offence that is punishable under law (Townsend & Gordon, p. 67).

Another effort that is being implemented by the international community to minimize on poverty is finding alternative measures to utilize available resources. Overpopulation which has led to environmental degradation has been one of the serious causes of poverty in the world. Most organic resources are becoming extinguished making a large mass of people to fight for the little that are available. This has also made such resources to be too expensive for the average man to afford. Science and technology is launching into inventions that will ensure that people adapt lesser costly measures to carry out their activities. Reuse and the development of recycling industries are some of the efforts that are being utilized to the maximum to ensure that there is no unnecessary loss (Pogge, p. 123).

Poverty is mostly considered to be an individual issue whose pain can only be understood by them that are living or have lived in it. Anybody who has been there will not want to go back and those that are there are trying their best to come out of it. As personal as it may seem to be, it affects a larger community and will hence require the efforts of a larger community to fight. One of the things that have hindered such progress is that fact that those that have the ability to deliver those in poverty from their situations can not understand their pleas. For those that were once in such situations and considered to be the best instruments of deliverance, forget everything as they concentrate on developing themselves. The paper has looked at the situation of poverty in the world, what causes it and the efforts of the international community to fight it.

• Bacci, Massim & Santis Gustavo. Population and poverty in the developing world. London: Oxford University Press, 1999.
• Kaul, Chandrika & Moschovitis, Valerie. Statistical handbook on poverty in the developing world. New York: Greenwood Publishing Group, 1999
• Kerbo, Harold. World poverty: global inequality and the modern world system. Michigan: McGraw-Hill, 2006.
• Myrdal, Gunnar. The challenge of world poverty: a world anti-poverty program in outline . Michigan: Pantheon Books, 1970.
• Pogge, Thoma. World poverty and human rights: cosmopolitan responsibilities and reforms . London: Polity, 2008.
• Seabrook, Jeremy. The no-nonsense guide to world poverty . New York: Verso, 2003.
• Townsend, Peter & Gordon, David. World poverty: new policies to defeat an old enemy. California: The Policy Press, 2002.
• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2021, December 25). Poverty in the World. https://ivypanda.com/essays/poverty-in-the-world/

"Poverty in the World." IvyPanda , 25 Dec. 2021, ivypanda.com/essays/poverty-in-the-world/.

IvyPanda . (2021) 'Poverty in the World'. 25 December.

IvyPanda . 2021. "Poverty in the World." December 25, 2021. https://ivypanda.com/essays/poverty-in-the-world/.

1. IvyPanda . "Poverty in the World." December 25, 2021. https://ivypanda.com/essays/poverty-in-the-world/.

Bibliography

IvyPanda . "Poverty in the World." December 25, 2021. https://ivypanda.com/essays/poverty-in-the-world/.

• Global Poverty Project: A Beacon of Hope in the Fight Against Extreme Poverty
• Poverty Around the World
• Wealth and Poverty: The Christian Teaching on Wealth and Poverty
• War on Poverty: Poverty Problem in US
• Is Poverty of Poor Countries in Anyway Due to Wealth of the Rich?
• Poverty and the Environment
• Poverty, Government and Unequal Distribution of Wealth in Philippines
• Poverty in Brazil
• Concept of Poverty
• What Causes Poverty in the World
• The End of Poverty Possibility
• Mumbai Great Problem: Homelessness Problem in Cities
• South Africa and Kenya Development Project
• Social and Economic Policy Program: Globalization, Growth, and Poverty
• World Hunger: Cause and Effect

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Key facts about asian americans living in poverty.

Asian Americans are often portrayed as educationally and financially successful when compared with other racial or ethnic groups. However, Asian origin groups in the United States vary widely in their economic status and education level . Indeed, more than 2.3 million Asian Americans – about one-in-ten – lived in poverty in 2022, according to a Pew Research Center analysis of U.S. Census Bureau data.

Learn more about Asian Americans’ experiences with economic hardship in  our data essay  and  short film .

Here are nine facts about Asian Americans living in poverty.

Pew Research Center conducted this analysis to better understand the characteristics, experiences and views of Asian Americans living in poverty today. It is part of a three-part study that includes an analysis of 18 focus groups conducted with 144 Asians living with economic hardship completed in February 2023 and a short film about Asian families who have experienced economic hardship .

This analysis is based on two main data sources. The first data source is the U.S. Census Bureau’s 2022 American Community Survey (ACS) provided through Integrated Public Use Microdata Series (IPUMS) from the University of Minnesota. In this analysis, poverty status is determined using the 2022 federal poverty line for the 48 contiguous states and the District of Columbia, Alaska, or Hawaii, depending on respondents’ state of residence, published by the U.S. Department of Health and Human Services. For example, a family of four living in 48 contiguous states and the District of Columbia were categorized as living “in poverty” if they make a yearly income of $27,750 or less.

The second data source is Pew Research Center’s 2022-23 survey of Asian American adults, conducted from July 2022 to January 2023 in six languages among 7,006 respondents. The survey analysis included 561 Asian adults whose approximate family income is at or below the 2022 federal poverty line for the 48 contiguous states and the District of Columbia, regardless of their state of residence. For more details, refer to the survey methodology . For questions used in this analysis, refer to the topline questionnaire .

Pew Research Center is a subsidiary of The Pew Charitable Trusts, its primary funder. The Center’s Asian American portfolio was funded by The Pew Charitable Trusts, with generous support from The Asian American Foundation; Chan Zuckerberg Initiative DAF, an advised fund of the Silicon Valley Community Foundation; the Robert Wood Johnson Foundation; the Henry Luce Foundation; the Doris Duke Foundation; The Wallace H. Coulter Foundation; The Dirk and Charlene Kabcenell Foundation; The Long Family Foundation; Lu-Hebert Fund; Gee Family Foundation; Joseph Cotchett; the Julian Abdey and Sabrina Moyle Charitable Fund; and Nanci Nishimura.

We would also like to thank the Leaders Forum for its thoughtful leadership and valuable assistance in helping make this survey possible.

The strategic communications campaign used to promote the research was made possible with generous support from the Doris Duke Foundation.

The terms Asians and Asian Americans  are used interchangeably throughout this post to refer to individuals who self-identify as Asian, either alone or in combination with other races or Hispanic identity.

The terms living in poverty and living near or below the federal poverty line are used interchangeably throughout this post to refer to those whose family income is close to or below the 2022 federal poverty line.

• For results on Asian adults from the survey , this refers to adults whose approximate family income falls at or below 100% of the federal poverty line.
• For data on the total U.S. Asian population from the U.S. Census Bureau , this refers to all Asian Americans whose family income is at or below 100% of the federal poverty line.

The term U.S. born refers to people who are U.S. citizens at birth, including people born in the 50 U.S. states, the District of Columbia, Puerto Rico, or other U.S. territories, as well as those born elsewhere to at least one parent who is a U.S. citizen.

The term immigrants , when referring to Census Bureau data, includes those who were not U.S. citizens at birth – in other words, those born outside the 50 U.S. states or the District of Columbia, Puerto Rico, or other U.S. territories to parents who were not U.S. citizens. When referring to survey respondents, this group only includes those born outside the 50 U.S. States or the District of Columbia, Puerto Rico or other U.S. territories.

About 10% of Asian Americans overall live in poverty, but poverty rates vary widely across origin groups. Burmese (19%) and Hmong Americans (17%) were among the Asian origin groups with the highest poverty rates in 2022. Meanwhile, Filipino (7%) and Indian Americans (6%) were among the groups with the lowest poverty rates.

A third of Asian Americans ages 25 and older who live in poverty have a bachelor’s degree. By comparison, among non-Asians 25 and older who live in poverty, only 14% have a bachelor’s degree.

Asian Americans 25 and older with at least a bachelor’s degree are still less likely to live in poverty (5%) than those with less formal education (13%).

Nearly six-in-ten Asian Americans who live in poverty are immigrants. And relatively few of these immigrants speak English proficiently.

Among Asian immigrants ages 5 and older living below the poverty line, 44% are proficient in English (meaning they either speak only English or speak the language very well). By comparison, 61% of those immigrants above the poverty line speak English proficiently.

About 1 million Asians who are below the poverty line live in 10 U.S. metropolitan areas. In fact, more than 500,000 live in just three metropolitan areas: New York City, Los Angeles and San Francisco. These metro areas each have about 100,000 or more Asians living in poverty, and together they hold 26% of all Asian Americans living in poverty.

Fresno, California (19%), Buffalo, New York (18%) and Pittsburgh, Pennsylvania (15%) are among the metro areas with the highest poverty rates among Asian Americans. Still, Asian Americans who live in poverty largely reside in places with larger Asian populations than these metro areas.

Refer to a downloadable spreadsheet for detailed data on the number and share of Asians living in poverty by metro area.

Around eight-in-ten Asian adults who live in poverty (79%) have experienced financial challenges in some way in the past 12 months, according to a Pew Research Center survey of Asian adults conducted in 2022 and 2023. By contrast, 48% of Asian adults living above the poverty line say they have experienced the same. Among the specific financial challenges they faced:

• 57% of Asian adults living in poverty were unable to save for emergencies, compared with 40% of Asian adults living above the poverty line.
• 42% had trouble paying their bills, more than twice the share of Asian adults living above the poverty line who said the same (17%).
• 38% have gotten food from a food bank or charitable organization, about six times the share among Asians living above the poverty line (6%).

Financial difficulties tend to come in bundles: Among those living in poverty who say they experienced at least one of the financial challenges asked about, 65% experienced two or more.

A majority of Asian adults who live in poverty (61%) have turned to family or friends for help with bills, housing, food or employment.

A large share (49%) also say they have sought help from local, state or federal governments. Smaller shares have sought help from religious institutions such as churches or temples (21%) or Asian community groups (13%).

However, 19% of Asian adults living in poverty say they have not sought help from any of the sources asked about in the survey.

Why Asian immigrants came to the U.S. is linked to whether they have received help from the government. For example, a third of all Asian immigrants, regardless of poverty status, who came to the U.S. due to conflict or persecution in their home country have received help with bills, housing, food or employment from governments (33%). By comparison, smaller shares of Asian immigrants who came for educational opportunities (14%) or economic opportunities (16%) or who migrated to be with family (25%) say the same.

Roughly half of Asian Americans who live in poverty (47%) say the American dream is out of reach, but others say they have achieved it (15%) or are on their way to achieving it (36%). By comparison, Asians living above the poverty line are more optimistic about their chances of achieving the American dream: 26% say it is out of reach for them, while 27% say they have achieved it and 46% say they are on their way to achieving it.

Asian adults who live below the poverty line and those who live above it have similar views on what’s important to achieving the American dream. For Asians living in poverty, the vast majority say having freedom of choice in how to live one’s life (91%), a good family life (91%), children having the best opportunities (91%) and retiring comfortably (90%) are important to their view of the American dream. Among Asian adults living above the poverty line, similar shares say these elements are important.

Homeownership is also seen as key: 81% of Asian adults living in poverty and 87% of those living above the poverty line say owning a home is important to their view of the American dream. However, Asian adults in poverty are much less likely than those above the poverty line to be homeowners (40% vs. 71%), according to Census Bureau data.

Note: For more details, refer to the survey methodology . For questions used in this analysis, refer to the topline questionnaire .

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About Pew Research Center Pew Research Center is a nonpartisan fact tank that informs the public about the issues, attitudes and trends shaping the world. It conducts public opinion polling, demographic research, media content analysis and other empirical social science research. Pew Research Center does not take policy positions. It is a subsidiary of The Pew Charitable Trusts .