The significant reduction in extreme poverty from 44% in 1981 to 9% in 2019 highlights remarkable global economic advancements despite population growth.
Most poverty decline is attributed to improvements within the same generation rather than solely relying on younger generations' economic conditions.
Deep dives
Significant Decline in Global Poverty
The decline in extreme poverty worldwide is a remarkable achievement, with the percentage of individuals living in extreme poverty dropping from 44% in 1981 to 9% by 2019. This translates to approximately 1.3 billion fewer people living in poverty, despite the world's population growing. The analysis indicates that while poverty alleviation efforts continue, it is essential to recognize the substantial progress made over the decades. The data suggests that if the poverty rates of the 1980s were applied to today's population, approximately 2.5 billion people would be living in poverty, underscoring the impressive strides made in poverty reduction.
Cohort-Based Poverty Analysis
A cohort-based analysis reveals that the majority of poverty decline has occurred within the same generation rather than being solely attributed to younger generations experiencing improved economic conditions. The study examined poverty rates across five countries, showing that individuals from the same birth cohort uniformly witnessed a decline in poverty over time. This suggests that many people are experiencing improved living conditions rather than relying on the next generation to escape poverty. The findings highlight that while generational improvements exist, significant intra-generational economic progress has also played a crucial role in reducing poverty rates.
Complex Pathways Out of Poverty
The pathways by which households escape poverty are varied and complex, as many do not rely on changing their occupations or migrating to urban areas. The data shows that households exit poverty without altering their economic status significantly, indicating that multiple avenues exist for escaping poverty, and no single path predominates. Transfers and social safety nets are acknowledged as important for temporary support but account for a minimal portion of overall poverty decline. Additionally, women entering the labor force positively correlates with reduced poverty, but the sheer volume of households where women remained out of work suggests a multifaceted challenge to poverty reduction.
In 1981, 44% of the world’s population were living in extreme poverty. By 2019, that number had fallen to 9%. This seems like a good news story, but how did it happen?
Tom Vogl of UC San Diego is one of the authors of a paper called simply, “How Poverty
Fell”. In it, they use surveys to track the progress out of poverty of individuals and
generations, to discover whether this progress has been driven by individuals and families becoming less poor over their lives or by successive generations who are less likely to be born into poverty. Has the progress been driven by women in the workplace, by government support, or by the move out of agriculture? And, significantly, do those who move out of poverty stay in that position or, is it, as Tom tells Tim Phillips, “Like climbing a slippery slope”?
