For example, 803 million multidimensionally poor people live in a household where someone is undernourished, 476 million have an out-of-school child at home, 1.2 billion lack access to clean cooking fuel, 687 million lack electricity and 1.03 billion have substandard housing materials. It is the fact that still almost every tenth person lives in extreme poverty and the slowing progress against extreme poverty that motivate this entry.

The world economy is growing. One possibility would be to simply use the exchange rates from currency markets to translate all national figures into one common currency—such as, for example, the US-dollar. World Bank Group. | w22683). Economists Xavier Sala-i-Martin and Maxim Pinkovskiy estimated the share of the world population living in absolute poverty.80. GDP per capita is used to measure national incomes, and figures are expressed in ‘real terms’, which means they are adjusted for inflation.

Source for official entrance age to primary school: United Nations Educational, Scientific and Cultural Organization, Institute for Statistics database. A country may have a unique national poverty line or separate poverty lines for rural and urban areas, or for different geographic areas to reflect differences in the cost of living or sometimes to reflect differences in diets and consumption baskets. Across 107 developing countries, 1.3 billion people—22 percent—live in multidimensional poverty. Debunking the Stereotype of the Lazy Welfare Recipient: Evidence from Cash Transfer Programs Worldwide. The global incidence of extreme poverty has gone down from almost 100% in the 19th century, to 10.7% in 2013. Some of the poorest countries in the world have the lowest GDPs and literary rates of any other countries. The source defines the universe of low and middle income countries as all countries except: Australia, Belgium, Cyprus, Finland, France, Germany, Greece, Iceland, Ireland, Israel, Italy, Luxembourg, Japan, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom and United States.
These alternative notions of welfare play an important role in academia and policy, and it is necessary to bear in mind that they are interrelated. Indeed, as we explain below, many of these concepts indirectly enter the methodology used by the World Bank to measure poverty; for example, by helping set the poverty lines against which monetized consumption is assessed. Where does this number come from? It was less than half the size before 1994, adjusted for inflation. 42% of these were extremely poor. Data are compiled from official government sources or are computed by World Bank staff using national (i.e. You can find further definitions and explanations in the MPI’s documentation. Multidimensional poverty trends do not match monetary poverty trends, suggesting different drivers. Available online here. While poverty rates at national poverty lines should not be used for comparing poverty rates across countries, they are appropriate for guiding and monitoring the results of country-specific national poverty reduction strategies. Bourguignon and Morrison (2002) rely on three types of data in order to estimate the distributions of income: economic output (real GDP per capita), population, and inequality. While in Malawi the national poverty line is equivalent to 1.27 int.-$ per day, in Norway it is equivalent to 35.10 int.-$ per day. The light blue bars show the impact of this intervention, measured by the yearly average increase in household consumption, three years after the productive asset transfer and one year after the end of the program intervention. The Multidimensional Poverty Index (MPI)—shown in the world map above and published by the Oxford Poverty & Human Development Initiative (OPHI)—is the most common international instrument used in this context.
The set of national poverty lines estimated by Jolliffe and Prydz suggests, in contrast to earlier findings by Chen and Ravallion, that there is substantial variation in poverty lines even among the poorest countries. Banerjee, A. V., Hanna, R., Kreindler, G., & Olken, B. The national poverty rate in 2017 was 13.4% after falling for the fifth year in a row.

The authors find that nighttime lights are much more closely correlated with GDP per capita than with survey means.

The data is available at PovcalNet and visualized here In 2005 26% of the world lived on more than 10 international-$ per day (1.695 billion); in 2015 this increased to 35% (2.595 billion). Deaton, A. and Kozel, V. 2005a. Under the assumption that these inefficiencies are not growing over time, the reduction of the total size of the poverty gap over the last few decades is good news.

More precisely, if physical capacity to work increases nonlinearly with food intake at low levels (i.e.

List of countries ranked by Population below poverty line. If poverty rates by country in 2016 are to be considered, it is clear there is not much improvement in 2017, which is unfortunate, to say the least. Despite the clear evidence, many people are not aware of the fact that extreme poverty is declining across the world. We license all charts under Creative Commons BY. For example, Bangladesh and Bolivia have relatively similar poverty gaps (the mean shortfall is close to 3% of the poverty line), but they have very different poverty rates (the share of population in poverty in Bangladesh is 14.8%, while in Bolivia it is 7.1%). The approach outlined above leads to a natural question: How can researchers construct economic output for the distant past? The chart shows the results. Economic growth over the last 200 years completely transformed our world, with the share of the world population living in extreme poverty falling continuously over the last two centuries.

The underlying source of data is Newhouse, D. L., Suarez-Becerra, P., & Evans, M. (2016).

According to the estimates shown here, there were close to 2 billion people living in extreme poverty in the early 1980s, and there were 735 million people living in extreme poverty in 2015.

2 (2016): 141-172. | Studies also suggest that survey design matters for sampling purposes. Indeed, ‘extreme poverty’ is an adequate term for those living under this low threshold.

In the same year – 1981 – the population of China was 1 billion.

This means that roughly 336,000 West Virginians lived in poverty in 2017. The perceived boundary between poor and non-poor typically rises with the average income of a country and thus does not provide a uniform measure for comparing poverty rates across countries. The following visualization from the World Bank’ Africa Poverty Report (2016) plots regional trends for different subsets of countries. This very positive development has been possible in part due to the remarkable improvements in East Asia and the Pacific, where poverty rates went from 81% in 1981 to 2.3% in 2015. Another approach—less common but also employed in practice—is to set absolute lines based on asking people what minimum consumption or income level they need just to make ends meet. When richer individuals or households are less likely to answer surveys than poor people, survey-based estimates of consumption and income will understate the mean level of prosperity and overstate the share of people in poverty. More than a third of the world population now live on more than 10 dollars per day. The most common way to measure the intensity of poverty is to calculate the amount of money required by a poor person to just reach the poverty line. A fundamental question that cuts through this topic is whether we have a good sense of the actual cost of ending poverty.

A disregard for or disinterest in poverty estimates that are calculated on the basis of low consumption and income levels is partly explained by the fact that it can be very difficult for people to imagine what it is like to live with very little.

Review of Income and wealth, 47(3), 283-300. Available online here.

Available from, Atkinson, A. Conceptually, poverty traps can also take place at a collective ‘macro’ level. The first point that we need to consider here is that the standards used by rich countries to measure poverty nationally are substantially different to the standards used by the World Bank to measure extreme poverty in low- and middle-income countries.

If we are interested in material deprivation, any monetary income should be considered in relation to the amount of goods and services that it can buy locally. In World Bank Economic Review; available here:, See Martin Ravallion (2015) – The Economics of Poverty: History, Measurement, and Policy and section 8 in Martin Ravallion (2016) – Are the world’s poorest being left behind? The source defines the universe of low and middle income countries as all countries except: Australia, Belgium, Cyprus, Finland, France, Germany, Greece, Iceland, Ireland, Israel, Italy, Luxembourg, Japan, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom and United States. The following visualization summarizes the evidence. This second approach was first explored by Ahluwalia et al. Beegle et al. While this is a great achievement, there is absolutely no reason to be complacent: a poverty rate of 10.7% means a total poverty headcount of 746 million people. It’s not just a concern until 2030: without rising incomes in the worst-off places extreme poverty will remain a reality for millions. This is the case for many African countries, where there is only one survey available in the last decade. Focusing on extreme poverty is important precisely because it captures those most in need. On any average day in the last decade the number of people living on more than $10 increased by almost a quarter of a million (246,500).22.