thesis statement about global poverty

Global Poverty

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• > Journals
• > International Journal of Law in Context
• > Volume 13 Special Issue 4: Global Social Indicator...
• > Fighting global poverty

Article contents

• Claiming credit for improvements
• Three main factors affecting the evolution of poverty
• Against what baseline should we measure ourselves?
• The World Bank's poverty headcount ratio
• The Individual Deprivation Measure
• Comparing the IDM to the Human Development Index (HDI) and Multidimensional Poverty Index (MPI)

Fighting global poverty

Published online by Cambridge University Press:  03 January 2018

Many different indicators are used to monitor poverty and poverty-related deprivations. Two kinds of legitimacy worries may arise about any such indicator: one regarding its reliability as a measure of progress and another regarding the uses to which it is being put. This essay will touch upon both worries, beginning with the latter.

I. Claiming credit for improvements

In 2006, legendary investor Warren Buffett announced the largest charitable gift of all time. He pledged to give away the bulk of his fortune – then worth about USD 44 billion (cf. Loomis, Reference Loomis 2006 ) – to the Bill and Melinda Gates Foundation.

Ten years later, with nearly USD 20 billion already transferred, Footnote 1 Buffett wrote a letter to the Gates couple asking them to reflect on what they had done with his gift, on what had gone particularly well or poorly, what they had learned and what they hoped would be achieved in the future:

‘I'm not the only one who'd like to read it. There are many who want to know where you've come from, where you're heading and why. I also believe it's important that people better understand why success in philanthropy is measured differently from success in business or government. Your letter might explain how the two of you measure yourselves and how you would like the final score card to read. Your foundation will always be in the spotlight. It's important, therefore, that it be well understood. And there is no better way to this understanding than personal and direct communication from the two whose names are on the door.’ Footnote 2

Though entitled ‘Warren Buffett's best investment’, the Gates couple's 6,000-word response is remarkably inadequate to Buffett's modest request. Instead of providing information about the work of their foundation and justifying the decisions they had made against the background of alternative priorities, they provide some choice statistics about how the world has become better in recent years and how people are often unaware of how much progress there has been: ‘122 million children under age five have been saved over the past 25 years’; ‘the number of childhood deaths per year has been cut in half since 1990.’ ‘Coverage for the basic package of childhood vaccines is now the highest it's ever been, at 86 percent’ vs. 77 per cent in 1990. The number of women in developing countries using modern methods of contraception has increased from 200 to 300 million in thirteen years, while it took decades to reach 200 million. New polio cases have decreased from 350,000 in 1988 to thirty-seven in 2016.

With regard to poverty, the Gates couple refers to a Glocalities global survey of 26,492 people from twenty-four countries. This survey found that 70 per cent of respondents believe that global poverty has increased by a quarter or more since 1990, 18 per cent believe it has stayed about the same, 12 per cent believe it has declined by a quarter and only 1 per cent believe it has been cut in half. According to Glocalities, the last answer is correct: ‘1 billion people have risen out of extreme poverty since 1990.’ Footnote 3 The Gates letter puts the matter differently: ‘In a recent survey, just 1 percent knew we had cut extreme poverty in half, and 99 percent underestimated the progress.’

While Glocalities (relying on the World Bank) merely claims that this poverty reduction happened, the Gates letter adds a claim about its causes – ‘we’ made it happen – and thereby suggests an answer to the question Warren Buffet had posed: the question, namely, what the Gates Foundation had achieved with his gigantic donation. On reflection, however, the suggested answer is deeply problematic.

For one thing, the Gates Foundation is not the only philanthropic organisation dedicated to fighting poverty and poverty-related deprivations – though it does outspend its peers by a wide margin. Footnote 4 A solid answer to Buffett's question would involve a comparative study of these organisations to estimate how much each of them has actually accomplished, and at what cost.

Moreover, the same battle against poverty is also fought by the governments of affluent countries (through their official development assistance Footnote 5 ), by supranational organisations such as the World Bank, the Global Fund and the UN Food and Agriculture Organization (FAO) as well as by the poorer countries’ governments and non-governmental organisations (NGOs). Just like the Gates Foundation, all these many agencies have a vested interest in seeing and presenting themselves as successful in their work. It is not surprising then that, if you add up the successes they report in terms of lives saved and people lifted out of poverty, you end up with astronomical figures that far exceed any progress that might conceivably have occurred in the real world.

II. Three main factors affecting the evolution of poverty

This brings us to a third point. Clearly, the credit we give to all those poverty-fighting organisations and agencies is subject to the constraint that we must not assign credit for more poverty reduction than has actually occurred. But do those poverty fighters collectively deserve credit for the entire decline in global poverty? This assumption is questionable in view of economic growth. Recent centuries have seen each generation invest part of its income towards expanding the capital base: machinery, technology, know-how and the like. As a consequence – barring catastrophes such as epidemics or major wars – productivity is continuously rising, and with it the average income per capita . In the absence of political oppression and other forms of severe injustice, this growth-induced rise in the average income ‘lifts all boats’, with incomes in all percentiles of the population rising roughly in proportion with the average income.

To illustrate. In 1955, a large proportion of South Korea's population lived in severe poverty. Fifty years later, this proportion had greatly declined. I will not deny that various anti-poverty efforts played some role in this decline. But surely the vast majority of it did not come about through efforts to lift people out of poverty, but through economic growth distributed by the ordinary operation of familiar market forces. As South Korea's capital stock increased through investment, labour became more productive and employers could therefore sustainably pay higher wages. And employers did indeed raise wages roughly in line with rising productivity because they were competing with one another over a limited labour supply. Rising wages constitute progress against poverty; but they need not manifest the success of any anti-poverty efforts.

One might think, on the contrary, that South Korea's governments during the relevant period deserve credit for the substantial poverty reduction. But, as shown by the very small gaps between South Korea's pre-tax and post-tax Gini coefficients (Kang, Reference Kang 2001 , p. 31, Table 17), these successive governments’ policies were only minimally redistributive: pursuing economic growth, not poverty reduction. To be sure, the relevant South Korean governments deserve credit for achieving (with considerable help from the US) high rates of economic growth. And it is also true that this growth would not have produced substantial poverty reductions as a side effect had these governments maintained blatantly unjust social institutions, such as slavery and serfdom, under which a rich minority could have appropriated the gains from national economic growth to itself. By avoiding such injustices and facilitating a competitive labour market, successive governments allowed South Korea's poor to participate proportionately in national economic growth. Footnote 6 But it would be a stretch to say that they ‘lifted people out of poverty’. Avoiding discredit for causing additional poverty by unjustly constraining the poor is distinct from deserving credit for successful anti-poverty efforts. On the economic front, the relevant South Korean governments deserve neither blame for maintaining structural injustices that would have caused the poor to be left behind nor credit for pro-poor initiatives that would have allowed the poor to catch up.

Reflection on the case of South Korea suggests that the evolution of poverty is driven by three main factors: growth, distributive social institutions and anti-poverty initiatives. Economic growth (or contraction), tracked by the evolution of the average income, tends to raise (lower) incomes at all percentiles and thereby to increase (decrease) the share of the population living below any particular absolute poverty line. Institutional injustice can prevent the poorer percentiles from participating proportionately in economic growth and thereby delay the eradication of poverty; conversely, structural reforms of unjust social institutions can temporarily produce super-proportional income growth in the poorer percentiles with accelerated poverty reduction. Anti-poverty initiatives by governmental, inter-governmental or non-governmental organisations can reduce poverty and thereby, in particular, mitigate some of the adverse effects of structural injustice. The distinction of these three factors can be applied at the global level as well as at the level of national societies.

When the Gates couple answer Warren Buffett's question about the global impact of their foundation by simply citing choice statistics about the falling prevalence of various deprivations, they are then not merely failing to disentangle the impact of their foundation's work from the impact of all the many other anti-poverty efforts, but they are also failing to disentangle the aggregate impact of all these efforts (the third factor) from the effects of economic growth (Factor 1) and from the effects of how distributive social institutions have been structured and revised (Factor 2).

Let me illustrate with another statistic cited in the Gates response: ‘122 million children under age five have been saved over the past 25 years. These are children who would have died if mortality rates had stayed where they were in 1990.’ Apply this to the world's most populous country. China's under-five mortality rate reportedly was 5.38 per cent in 1990 and 1.07 per cent in 2015. Footnote 7 Given 16.5 million births in 2015, Footnote 8 we thus have saved about 711,000 Chinese children in 2015 and nearly 11 million over the 1990–2015 period. Should this claim strike you as overly modest, you can easily inflate it by replacing Gates's arbitrarily chosen baseline year with an earlier one to produce even larger numbers. You might, for instance, choose 1969, when China's under-five mortality rate was 11.91 per cent, and then use the Gates method to calculate that we have saved 1.8 million Chinese children in 2015, 40 million since 1990 and 160 million since 1969. Needless to say, such claims are absurd.

III. Against what baseline should we measure ourselves?

The deeply flawed use of deprivation indicators in the Gates letter is by no means a unique event. It also infects the largest concerted use of indicators in the history of humankind: the Sustainable Development Goals (SDGs), as well as their predecessors, the Millennium Development Goals (MDGs). The flagship target of the MDGs was the promise to halve the prevalence of extreme poverty in the developing world between 1990 and 2015 – a promise adorned with beautiful words: ‘We will spare no effort to free our fellow men, women and children from the abject and dehumanising conditions of extreme poverty, to which more than a billion of them are currently subjected.’ Footnote 9 The suggestion here was that the world's governments adopting the Millennium Declaration were going to make a large concerted effort sufficient to free 23.5 per cent of the population of the developing world from extreme poverty (UN, 2015 , p. 14). By counting the effects of ordinary economic growth towards their objective, governments ensured, however, that the actual anti-poverty effort required of them would be much smaller, if not zero. Just consider the fact that, at the time the promise was made in the year 2000, half of the promised poverty reduction had already occurred. Footnote 10 Governments could readily predict that the economic growth expected over the next fifteen years would get the percentage down to the target without any special anti-poverty efforts on their part. While pompously declaring that they would spare no effort to reduce extreme poverty, our governments in fact formulated their goal so that they would need to make no such effort.

I have not argued that the World Bank's headcount measure is an illegitimate indicator of the extent of poverty in the world – I will do so in the next section – but that it is an illegitimate indicator to use for gauging the success of anti-poverty efforts. The indicator can decline substantially even in the absence of any anti-poverty effort. That this is close to what actually happened is supported by data on global inequality – expressed either in terms of market exchange rates or in terms of purchasing power parities. These data suggest that, during the 1990–2015 MDG period, the world's poor did not do particularly well: while some large developing countries – notably China and India – achieved substantially higher rates of per capita economic growth than the more affluent OECD countries, they also saw sharply rising inequality. In fact, income inequality has increased in a large majority of countries (see e.g. UNU-WIDER, 2015 ). And many developing countries, especially many poorer ones, saw per capita income growth below the world average. Footnote 11 Overall, as Branko Milanovic's famous elephant chart shows (cf. Thompson, Reference Thompson 2014 ), there was no significant narrowing of the gigantic gap between the income of humanity's poorest percentiles and the average income in the era of the much-touted MDG initiative.

The foregoing discussion may suggest that our success in the fight against poverty should be measured while controlling for economic growth. One might do this by tracking the difference between the actually observed poverty reduction and the hypothetical poverty reduction that would occur if the lower percentiles of the income distribution were participating proportionately in economic growth. Or one might do it by tracking the ratio between the average income of the poorest percentiles and the average income of the entire population.

Such indicators are more fit for purpose, to be sure. But their use is still problematic by unduly rewarding us for the sins of the past: the worse previous generations have done in avoiding poverty, the more credit we get for the condition of the poor today. This feature, encouraged by the official language of goals and their ‘progressive realisation’, does not fit with the understanding – more prominent before the propagation of development goals – of freedom from poverty as a human right . Unfulfilled human rights are decidedly not rendered morally more acceptable by the fact that, like deprivations, they were even more common and severe in the past. To appreciate this point, consider the example of slavery in the US ante-bellum South. Imagine a defender of slavery in 1845 describing all the ways in which slavery had become less cruel during the preceding twenty years: slaves were not worked as hard as had been customary in 1820, floggings and rapes of slaves had become less brutal and less frequent, and it had also become less common for slave families to be split apart through sales to different buyers. Would all this progress justify or excuse, in any way, the continuation of the practice of slavery? Evidently, it would not. The fact that slavery had been even worse in earlier times is morally irrelevant. The morally relevant comparison is not with what had been actual twenty-five years earlier, but with what was possible right then, in 1845. If it was possible to abolish slavery in 1845, then slavery ought to have been abolished then.

We should make the analogous response to the persistence of widespread deprivation: insofar as severe poverty is now avoidable, with our presently available economic, technological and administrative capacities, we must eradicate it from our world as quickly and thoroughly as is humanly possible. The fact that such poverty was even worse, perhaps much worse, in earlier years should not be allowed to detract from this moral imperative. In both cases, the morally relevant comparison is not the diachronic one with an earlier state of the world, but the hypothetical one with what is presently possible. The abolition of slavery was possible in 1845, and so it should have been abolished then. Insofar as the eradication of severe poverty worldwide is possible today, we must eradicate it now, as fast as we possibly can.

Once this point is recognised, we might construct a different indicator for historical comparisons, exhibiting how much of the severe poverty extant in different periods of human history was avoidable at those times, and at what level of sacrifice. Unlike the historical comparison that the MDGs and SDGs seek to encourage, this historical comparison is likely to be unflattering to our present generation. Never in human history has so much severe poverty been as easily and as completely eradicable as in the present period. That we continue to perpetuate it manifests a great moral failing of our generation, of governments and citizens alike.

IV. The World Bank's poverty headcount ratio

Let us now turn to discussing the legitimacy of the leading poverty indicators themselves, apart from the uses to which they have been put. The most prominent deprivation measure today is the headcount ratio maintained by the World Bank. It reports on what percentage of the population of the developing countries is living in extreme poverty: below some rigid level of daily-consumption expenditure, most recently defined in terms of the purchasing power that USD 1.90 had in the US in 2011. We have already seen how such a measure is misleading by registering progress even when the world's poor participate only subproportionately in the rise of the global average income and are thus falling ever farther behind. The measure has various other flaws that are worth highlighting as well.

The World Bank's headcount measure focuses on the living and ignores those who die prematurely from deprivation. This can lead to perverse results, such as a severe famine resulting in measured progress. Suppose, for instance, that, before a famine, 24 per cent of the population was living below the extreme-poverty line. The famine then kills 5 per cent of the population, all from among the poorest. After the famine, the bank would report progress: thanks to the famine, its poverty headcount ratio has improved from 0.24 to 0.20 (= 19/95). This reported improvement occurs because the famine's death toll produces a larger relative decline in the number of poor (numerator) than in the population at large (denominator).

The same exclusive focus on the living also provides perverse incentives to policy-makers aiming for credited poverty reduction. Because the headcount ratio improves as the poorest die early from deprivation, a policy-maker may be tempted to do nothing for the poorest people, or even to worsen their situation, rather than undertake the more arduous task of improving their condition all the way above the poverty threshold. Footnote 12

Moreover, by counting the number of people living below a rigid poverty line, the measure takes no notice of how far below (depth of poverty) or above the line people fall. Footnote 13 This neglect gives policy-makers aiming for credited poverty reduction a perverse incentive to focus their efforts on people living just below the poverty line because it is easier and cheaper to bring them above the threshold than their poorer peers.

The World Bank's headcount ratio measure also makes the result of the monitoring excessively dependent on the level at which the poverty line is set. Great progress can be expected when the poverty line is fixed right above a major population bulge, so that impending economic growth will lift large numbers of people over the threshold. We can appreciate the problem empirically by looking at what poverty reductions the World Bank reports for various alternative international poverty lines for the 1990–2013 reporting period. We find that, generally, the lower a poverty line is chosen, the more progress appears. For its own chosen poverty line of USD 1.90 (2011), the bank reports that the number of people living below it has declined by 58.4 per cent (from 1,840.47 to 766.01 million) in these twenty-three years and that, in relative terms, poverty has fallen by 70 per cent (from 42.01 per cent to 12.55 per cent). For a less frugal daily poverty line, moored to the purchasing power that USD 6.10 had in the US in 2011, the bank reports that – in the same 1990–2013 period – the number of poor people has increased (from 3,673.49 to 3,693.34 million) and, in relative terms, poverty has fallen by only 28 per cent (from 83.85 per cent to 60.51 per cent of the six regions counted). Footnote 14 So the rather arbitrary choice of a poverty cutoff – wholly irrelevant to the world's poor – makes an enormous difference to how much progress is recorded.

Further serious problems arise from the need to convert the consumption expenditures of poor households into a common currency: lately, international dollars of the year 2011. The World Bank effects this conversion in two steps. First, using the consumer price index (CPI) of the relevant country, the bank converts amounts of local currency units (LCUs) of the year of measurement into LCU amounts of the base year, 2011. Second, using international purchasing power parities (PPPs) of 2011, the bank then converts the resulting LCU amounts into USD of the year 2011.

Both of these conversions are deeply problematic for the simple reason that the consumption pattern of the poor is very different from both the national and international consumption pattern of households in general. For example, a country's CPI may be heavily influenced by falling prices for air tickets and electronics, and it may then seem like the country's residents are becoming better off as their incomes are rising faster than inflation. In truth, however, the falling prices of air tickets and electronics cannot, for poor people , compensate for the rising prices of foodstuffs on which they – but not consumers in general – do and must spend nearly all their incomes.

PPPs involve analogous distortions. Poor-country currency amounts are typically deemed to have several times more purchasing power than official exchange rates suggest. This is due to the fact that some commodities are vastly cheaper in poor countries. These are commodities – like land and personal services – that are difficult or impossible to trade across national borders. With commodities that are easily tradable, price differentials are much smaller (kept low, of course, by arbitrageurs). Because foodstuffs are tradable, they are not as much cheaper in poor countries as PPPs suggest. In fact, a USD amount buys more food in the US than its PPP equivalent buys in any poor country – about 50 per cent more food on average. Footnote 15

A further problem with the World Bank's method is that it focuses on households: a person is counted as poor just in case the household s/he belongs to is living on less than the calculated equivalent of USD 1.90 (2011) per person per day. This focus on households is problematic because it ignores the intra-household distribution by simply assuming that all household members participate equally in the household's consumption. We know that this is false, that women and girls, in particular, are often disadvantaged within their households in terms of access to food, education and much else. Any adequate monitoring of deprivation must be sensitive to such disparities – must be open to the possibility that some members of a household are more deprived than others.

Yet another serious problem with the World Bank's method is that it attends solely on what can be measured in monetary terms: on consumption expenditure. The inadequacy of this exclusive focus is most easily appreciated when one considers what persons must do to earn whatever money they spend. Two persons may have equal income, one by freelancing for a few hours per week, the other by working eighty hours per week in a stressful and unhealthy environment, such as a mine or high-pressure garment factory. The bank's method counts these two persons as equally poor; but the former is really much better off, especially if she can use some of her much greater leisure time to double her income at will.

Climate is another non-money factor that seems relevant to measuring a person's poverty or degree of deprivation: other things equal, a person is poorer when her income is earned in a harsh climate where she faces exceptional clothing and heating requirements, for example. Analogously, a person at some given expenditure level can be considered poorer if she has special needs such as, for instance, a physical or mental disability requiring extra expenditures. A further relevant factor is the availability of public goods: other things equal, a person is less poor when she lives in a community in which she can rely on free or subsidised food, clean water, medical services, education or public transportation.

V. The Individual Deprivation Measure

Let us next examine a very different way of monitoring deprivation: the Individual Deprivation Measure (IDM), developed by a research team in Australia which I was privileged to be part of. Footnote 16 We conceived this measure with the goal of avoiding the perceived weaknesses of the World Bank approach, leaning in particular towards the following six features.

First, the IDM should measure the deprivation of individuals rather than of households, leaving room for the realistic possibility that members of the same household are at different levels of deprivation. Footnote 17

Second, the IDM should be multidimensional – that is, sensitive to deprivations of various kinds rather than merely to lack of money.

Third, the IDM should recognise gradations of deprivation overall and in each of its dimensions rather than work with a simple binary distinction that throws together all people above some cutoff as well as all people below.

Fourth, the IDM should be sensitive to persons’ social and natural environments insofar as this context affects either their needs (e.g. climate) or their capacity to meet their needs (e.g. access to clean water or health services).

Fifth, the IDM should also be sensitive to persons’ own special characteristics (e.g. mental and physical disabilities) insofar as these relevantly affect their needs or their capacity to meet these needs.

Sixth, the IDM should be gender-sensitive: be designed to reveal gender disparities, in part by taking care to register deprivations predominantly faced by women and girls.

Perhaps the most significant innovation of our work was its participatory approach: our effort to develop the content of the IDM through a process of public reason that engaged some of those people who, living in severe poverty, have genuine experience of the phenomenon to be measured and also most at stake in how such monitoring is done. Through this participatory approach, we hoped to generate a better, more legitimate measure by including more relevant information and by gaining reflective approval from the people whose condition we were seeking to assess.

Employing experienced local research teams, we conducted two rounds of participatory research across six countries in Asia, Africa and the Pacific: Angola, Fiji, Indonesia, Malawi, Mozambique and the Philippines, exploring with community members how poverty should best be conceived and measured. Within each country, we selected three research sites, one urban community, one rural community and one marginalised community exposed to systematic exploitation or disadvantage. Footnote 18 The first round of research began with key informant interviews. Working with leaders and knowledgeable insiders from local communities, researchers sought to orient (or in most cases reorient) themselves to the particular community, its recent history and other relevant context-specific information. Next came group exercises using four distinct methods: guided group discussions, collaborative construction of poverty ladders that allow individuals to discuss different levels or categories of poverty, a collaborative exercise of ranking different dimensions of poverty, and a household mapping exercise to discuss how poverty may vary within the household as well as by age and by gender. The first round concluded with a set of in-depth individual interviews exploring central points from the group exercises in greater depth.

The results of the first round supported the features we had initially thought an adequate measure of deprivation should have. Nearly all participants conceived of poverty as multidimensional and supported the inclusion of several dimensions that were not primarily material. Most also distinguished various levels of deprivation in preference to a simple binary threshold and endorsed context- and agent-relative ways of assessing degrees of deprivation. The first round also gave us a large number of suggested dimensions of deprivation – including the familiar ones of food, water, shelter, clothing, sanitation, health and education, but also including some more unusual dimensions such as access to social support, control over decision-making and freedom from violence.

After some consolidation – including the elimination of overlap and of dimensions not deemed important by most of our informants – we went back to our eighteen sites for the second round of research with a list of twenty-five candidate dimensions in order to discuss with them which of these dimensions should finally be selected for the IDM, how gradations in each of these dimensions should be defined, and what weights should be assigned to the dimensions and to the various levels within them. Some further consolidation resulted from these discussions, and we ended up with a rather neat measure involving fifteen dimensions. Each of these dimensions features five levels ranging from a top level 5 of basic adequacy – not being deprived – to a bottom level 1 of being extremely deprived , with intermediate levels of being somewhat deprived , being deprived and being very deprived . Separately in each dimension, the five levels were given detailed specific definitions with the background idea that the gaps between levels would vary in importance, with the gap between levels 1 and 2 being of greatest importance (Weight 4), followed by the gaps between levels 2 and 3 (Weight 3), levels 3 and 4 (Weight 2) and levels 4 and 5 (Weight 1).

Using assessment of the full gap between levels 1 and 5 as a guide, the various dimensions were also assigned differential importance, with the five most important ones receiving a weight of 3, the next five a weight of 2 and the five least important ones a weight of 1. Combining intra- and interdimensional weighting, we thus ended up with the scheme of weighted scoring shown in Table 1 .

Table 1 IDM dimensions and increments

Adapted from Pogge and Wisor ( Reference Pogge, Wisor, Adler and Fleurbaey 2016 , p. 664).

The IDM thus assigns each person a raw score from 0 to 300, where 0 means that the person is extremely deprived in all fifteen dimensions, while 300 means that the person achieves basic adequacy in all fifteen dimensions and is not deprived in any.

Table 2 shows the fifteen dimensions that emerged from the second round.

Table 2 The fifteen dimensions of the IDM

There is no denying that the selection and specification of dimensions and levels as well as the assignment of inter- and intra-dimensional weights might have turned out somewhat differently if we had worked with different participants perhaps at different sites or in different countries. Footnote 19 Despite these unavoidable contingencies in our procedure, the resulting measure for monitoring deprivation is a vast improvement over the dominant World Bank method. I have already given some support for this judgment by sketching some serious flaws of the World Bank method and by motivating the six central features of the IDM. Let me stress two further advantages in addition.

While the World Bank's method can inform policy-makers and NGOs about which households and larger groups (defined e.g. by geography, ethnicity, religion, household composition or political affiliation) are especially vulnerable to deprivation, the IDM can convey a much more nuanced picture that reveals in detail which deprivations specific individuals and groups are exposed to and to what extent. The IDM is therefore much more useful as a guide for remedial action: for finding and then removing or counteracting special causes of vulnerability, and for designing and providing targeted support. The whole point of all the monitoring, after all, is to help us build a world free of poverty just as soon as we can.

It may seem obvious that the price of a more nuanced picture is that the data collection must be more time-consuming and expensive. In fact, the opposite is true. To accurately assess a household's consumption expenditure, the World Bank must conduct an extensive survey to develop a detailed accounting of the flow of goods and services this household consumes, including commodities purchased as well as goods and services received by gift or barter. The bank must distinguish a large variety of different goods and services, differentiated by kind and quality, trying to determine for each an appropriate recall period that yields the most accurate representation of the consumption flow. Footnote 20 All this makes the World Bank's household surveys very complex and time-consuming. By contrast, trying the IDM in the Philippines with 1,806 respondents, we found the average survey time to be forty-five minutes per respondent – an acceptable demand on their time even when two or more adults must be separately interviewed in a given household (for further discussion of the procedure and results, see Pogge and Wisor ( Reference Pogge, Wisor, Adler and Fleurbaey 2016 , pp. 667–671)). In short, the IDM is less costly to administer in terms of time and money, while also yielding vastly more useful data than the World Bank exercise. IDM data convey the sometimes starkly disparate situations of different members of the same household, and they also provide a rich and nuanced picture of the respects in which, and degrees to which, specific individuals and social groups are deprived.

A useful next step would be, in collaboration with the World Bank, to run a dual survey in a few select locations: administering both surveys to the same households in a few diverse locations and then subjecting the survey costs and resulting data to a detailed comparative analysis. I am hopeful that such a dual survey can be conducted in the near future.

VI. Comparing the IDM to the Human Development Index (HDI) and Multidimensional Poverty Index (MPI)

Preceding the IDM, there have been two other prominent efforts to complement the World Bank's method of tracking progress against poverty. Both of these were loosely inspired by Amartya Sen's capability approach. As our work on the IDM is indebted to these earlier efforts, it is worth explaining briefly how the IDM seeks to improve upon them.

The HDI was introduced by Mahbub ul Haq in 1990 and has since been used in the annual Human Development Reports published by the UN Development Agency (UNDP). Its main innovation is to abandon the World Bank's exclusive focus on the monetary value of consumption by proposing a three-dimensional metric that takes account also of health and education. The HDI was slightly revised in 2010, and I will here present this later version. Footnote 21

The HDI of a population, typically of a country, is calculated as the geometric mean of three components, each normalised to a scale of 0–1. These components are the population's life expectancy at birth ( L ), its education measured in terms of years of schooling ( E ) and its gross national income per capita ( P ). Each country ( C ) receives a score between 0 and 1 in each of these dimensions, and its overall HDI score is then the geometric mean of these three scores – that is, the cube root of their product, in a simple equation:

While the HDI is an advance by looking beyond the monetary value of consumption, it is also a step backward by being distribution-insensitive in all three of its dimensions. Thus, two countries with the same gross national income per capita – Hungary and Equatorial Guinea, say – earn the same P -score even though severe monetary poverty is suffered by only a few in Hungary and by a large majority in Equatorial Guinea (whose oil wealth is appropriated by a small elite). When the objective is to monitor development or the reduction of poverty, then it is evidently highly implausible to ignore how income is distributed and, in particular, what shares of a population's income are flowing to its poorest percentiles. It is similarly implausible to assign the same L -score to countries with the same overall life expectancy, thereby ignoring how life expectancy is distributed over social classes, for instance, or ethnic groups. Two countries may have the same national life expectancy even while they differ dramatically in regard to the life expectancy in the poorest quarter of their respective populations. Footnote 22 And the same problem recurs for education, where once again the average may or may not hide large discrepancies in how many years of schooling are available to the most disadvantaged segments of the population. Footnote 23

The MPI has been developed by Sabina Alkire and James Foster. It uses the same three equally weighted dimensions as the HDI but then correctly reverses the order of aggregation. Instead of aggregating first within each dimension and then across dimensions, the MPI aggregates first across dimensions within a single household and then across households. This order of aggregation is required to identify the households that are most disadvantaged overall and therefore ought to be of greatest concern from the standpoint of development or deprivation avoidance.

The MPI draws on a richer informational base than the HDI insofar as it focuses on individual households and includes a wider set of subdimensions. Yet it also contracts the informational base by distinguishing, within each subdimension, only two states: any household is either deprived or not deprived in that dimension. In the health dimension, the MPI replaces life expectancy with two equally weighted subdimensions: child mortality (a/no child within the household has died) and undernourishment (a/no household member is undernourished). Footnote 24 In the education dimension, the MPI features two equally weighted subdimensions: years of schooling (a/no household member has completed five years of schooling) and child enrolment (a/no school-aged child is out of school in Years 1 to 8). In the consumption dimension, the MPI features six equally weighted subdimensions: electricity (the household has/lacks electricity), drinking water (the household has/lacks access to clean drinking water within a thirty-minute radius), sanitation (the household has/lacks its own improved sanitation), flooring (the household is deprived just in case its floor consists of dirt, sand or dung), cooking fuel (the household is deprived just in case it has only wood, charcoal or dung to cook with), assets (the household is deprived just in case it owns no more than one of: radio, TV, telephone, bicycle, motorbike, car or tractor).

Once a household has been assessed, in a binary way, in each of these ten subdimensions, the information gathered is further contracted into one single binary assessment: if the household is deprived in more than five out of eighteen of the weighted subdimensions, then it is deprived overall. If it is deprived in fewer than six out of eighteen of the weighted subdimensions, then it is not deprived overall. Footnote 25

This double reduction to binary scores within each dimension and across dimensions discards much useful information about the depth of poverty and then gives rise to implausible comparative judgments: a household that is just barely deprived in six out of eighteen of the weighted subdimensions counts as deprived overall, while a household severely deprived in five out of eighteen of the weighted subdimensions counts as not deprived.

The IDM consciously avoids the problems of the HDI and the MPI. It looks at individuals rather than households and takes account of the depth of deprivation a person suffers in each of its fifteen dimensions. It therefore produces a far more plausible ranking of individuals as well as a rich and nuanced reflection of what the unmet needs of each person are. Additional to these advantages in content legitimacy, the IDM also has unique process legitimacy by being based on extensive interactions with poor people who, after all, have most closely experienced poverty and also the most at stake in how poverty is understood, measured and fought.

VII. Conclusion

Let us conclude by circling back to the opening thoughts about the role of deprivation monitoring. I have argued that the World Bank, affiliated governments and the Gates couple make illegitimate use of the World Bank's poverty indicator by using it to paint an overly rosy picture of heroic effort and achievement. By defining poverty in terms of a rigid threshold, Footnote 26 the bank makes all but certain that a growing global average income will result in reported progress against poverty. The IDM, by contrast, is non-rigid in two ways. It includes context relativity in some of its dimensions – for example in the ninth (being able to dress in a socially acceptable way), in the thirteenth (being able to influence change at the community level) and in the fifteenth (doing work that is socially respected). Moreover, the IDM invites adjustment of many of the dimension-specific definitions of levels as a society becomes more affluent. Thus, what counts as basically adequate from the perspective of the poorest in the dimensions of food, housing, health care, education and sanitation is likely to shift upward with development and is likely to be more minimal in very poor countries like Malawi and Niger than in less poor ones like Ghana, Nicaragua and the Philippines, where it may be appropriate to define levels in somewhat less frugal terms.

Although the IDM is context-relative in these two ways, it is not a relative measure like one that would single out as deprived the most disadvantaged quarter of a national population, say. It is entirely possible to conceive – and to achieve – a society and even a future planet Earth in which all human beings attain basic adequacy in all IDM dimensions. This would truly be a world without poverty – a world leaving no one behind. The World Bank, by contrast, uses these same celebrated phrases to aspire to a world in which no more than 3 per cent of all human beings – 255 million in the year 2030 – live in households below its international poverty line. Footnote 27

We see here once more how the dominant approach to poverty – exemplified by the World Bank and the MDGs/SDGs – is antagonistic to understanding freedom from poverty as a human right. This dominant approach thinks in terms of aggregates: if 97 per cent of humanity have escaped extreme poverty, we can ignore the 3 per cent who have not. And the dominant approach thinks in terms of progressive realisation: so long as the percentage below some rigid poverty line is shrinking, we can take pride in an improving world.

From a human rights perspective, both these attitudes are questionable. One single human being avoidably living in deprivation is morally unacceptable – the commitment to leaving no one behind is taken literally. Our goal must be that all human beings reach freedom from severe deprivation just as soon as possible. Taking this imperative seriously, our assessment of ourselves and the comparison of ourselves with earlier generations take account not merely of the state of the world's poor, but also of our own capacities. While there may well be less severe poverty today than there was in 1990 or 1960, what severe poverty persists is far more easily avoidable than in earlier times – as suggested by the fact that, at official exchange rates, the poorer half of humanity has today only 0.17 per cent of global private wealth Footnote 28 and 4.4 per cent of global income Footnote 29 – and therefore morally more problematic.

1 See < www.gatesfoundation.org/Who-We-Are/General-Information/Foundation-Factsheet > (accessed 11 October 2017).

2 Reproduced at < www.gatesnotes.com/2017-Annual-Letter > (accessed 11 October 2017).

3 See < www.glocalities.com/news/poverty.html > (accessed 11 October 2017). I have more to say about the legitimacy of this much-cited World Bank claim in Section IV below.

4 The Gates Foundation spent USD 4.7 billion in 2015. See 2015 Form 990-PF, available at < www.gatesfoundation.org/Who-We-Are/General-Information/Financials > (accessed 11 October 2017). It received USD 2.15 billion from Warren Buffett that year. See < www.gatesfoundation.org/Who-We-Are/General-Information/Foundation-Factsheet > (accessed 11 October 2017).

5 Which amounts to around USD 150 billion annually, including USD 31 billion from the US and USD 87 billion from the EU and its Member States. See OECD ( 2016 , Table 1 ).

6 The same table in Kang ( Reference Kang 2001 ) shows that South Korea's Gini coefficient for income was basically unchanged during the 1982–1999 period.

7 See < http://data.worldbank.org/indicator/SH.DYN.MORT > (accessed 11 October 2017).

8 See < https://www.statista.com/statistics/250650/number-of-births-in-china > (accessed 11 October 2017).

9 United Nations Millennium Declaration, adopted by the UN General Assembly. For the full text, see < www.un.org/millennium/declaration/ares552e.htm > (accessed 11 October 2017).

10 See UN ( 2009 , p. 17, Figure II.2b, ‘Proportion of the population living on less than $1.25 a day’).

11 See World Bank database at < http://data.worldbank.org/indicator/NY.GNP.PCAP.KD.ZG > (accessed 11 October 2017), listing some fifty poor countries with sub-par growth.

12 Suppose a country has a poverty headcount ratio of 0.24. Raising 4 per cent of this country's population above the poverty line would improve this headcount ratio to 0.20. But the World Bank would credit the country with the very same improvement if, among the poor, 5 per cent of the population were to die off from deprivation (lowering the headcount ratio from 24/100 to 19/95).

13 The World Bank provides a complementary poverty gap measure that indicates the depth of poverty. But the MDG/SDG exercises are tracking the headcount ratio alone.

14 All data are downloaded from the World Bank's own website PovcalNet at < http://iresearch.worldbank.org/PovcalNet/povDuplicateWB.aspx > (accessed 11 October 2017).

15 This shows that the World Bank's international poverty line of USD 1.90 (2011) per person per day is even more frugal than first appears. For full data, see Pogge ( Reference Pogge 2010 , note 127).

16 Our work is documented at < https://www.iwda.org.au/introducing-the-individual-deprivation-measure > (accessed 11 October 2017) and more extensively discussed in Pogge and Wisor ( Reference Pogge, Wisor, Adler and Fleurbaey 2016 ). For an early discussion, see also Chapter 4 of Pogge ( Reference Pogge 2010 ).

17 To my knowledge, the IDM is the first global poverty measurement exercise that focuses on individuals. Even the otherwise progressive Multidimensional Poverty Index (MPI) of the Oxford Poverty and Human Development Initiative (OPHI) collects data about households and thus cannot reveal intra-household disparities. See < www.ophi.org.uk/policy/multidimensional-poverty-index > (accessed 11 October 2017).

18 For example, a minority ethnic group, a post-conflict community or an illegal urban squatter settlement.

19 Our selection of countries was driven mainly by the fortuitous circumstance that we happened to have experienced and reliable partners there. It would obviously have been desirable to include sites in Latin America and South Asia as well.

20 For example, for onions, it might be best to ask the respondent to recall the number and size of onions consumed by her household over the last week, while, for plastic sandals, one might obtain the most accurate data by asking how many pairs the household purchased over the preceding year.

21 The HDI is explained in UNDP ( 2015 ). See also Pogge ( Reference Pogge 2010 , section 4.3).

22 Disaggregating a national life expectancy of seventy over the four income quartiles, we may find a distribution of <72,71,70,67> or one of <84,81,72,43>.

23 An inequality-adjusted variant of the HDI is outlined in a supplement to the Human Development Report 2015 , entitled ‘Technical Notes’, available at < http://hdr.undp.org/sites/default/files/hdr2015_technical_notes.pdf > (accessed 11 October 2017). While this variant would be an improvement, it does not quite solve the problem, for two reasons. First, the inequality-adjusted HDI is indifferent to whether the inequalities it records in the three dimensions tend to mitigate or aggravate one another. This is implausible because given dimensional inequalities are worse when the same people are disadvantaged in all three dimensions. Second, the inequality-adjusted HDI gives as much weight to inequalities at the top end of a distribution as to those at the bottom end. For example, the following two score distributions, both summing to 580, receive the same inequality penalty under the inequality-adjusted HDI: <73,73,73,73,73,73,71,47,12,12> and <100,100,100, 100, 30,30,30,30,30,30> – even though the first of these distributions is much inferior in terms of development or deprivation avoidance.

24 I suspect this replacement was motivated by an apparent (and embarrassing) implication of the capability approach, namely that health-care resources should be expended predominantly on males so as to ensure that their achievement in the health dimension does not lag behind that of females.

25 The subdimensions under health and education each have weight 3/18; the subdimensions under consumption have weight 1/18 each.

26 Over the years, the World Bank has revised its official international poverty line. It was initially defined in terms of what USD 1.00 could buy in the US in 1985, then in terms of what USD 1.08 could buy in the US in 1993, then in terms of what USD 1.25 could buy in the US in 2005 and most recently in terms of what USD 1.90 could buy in the US in 2011. The bank emphasises that these revisions do not alter the level of its poverty line, that they merely ‘update’ the poverty line in order to make its application to later years easier and more accurate.

27 Incredibly, the World Bank defines the end of poverty as a state of the world in which no more than 3 per cent of humanity live in extreme poverty. The World Bank, then, will consider SDG target 1.1 (‘eradicate extreme poverty for all people everywhere’) fulfilled in 2030 so long as the number of people in extreme poverty will then be no more than 255 million – more than today's entire populations of these thirty African countries: Benin, Botswana, Burkina Faso, Burundi, Central African Republic, Chad, Congo, Djibouti, Equatorial Guinea, Eritrea, Gabon, Gambia, Guinea-Bissau, Ivory Coast, Lesotho, Liberia, Libya, Malawi, Mali, Mauritania, Namibia, Rwanda, Senegal, Sierra Leone, Somalia, South Sudan, Togo, Tunisia, Zambia and Zimbabwe – a surprising interpretation of the ‘leave no one behind’ mantra. See World Bank ( 2016 , pp. 1, 26–27).

28 Total global wealth is estimated at $256 trillion (Credit Suisse, 2016 , p. 2); and the aggregate wealth of the poorer half at $ 426 billion, matching the aggregate wealth of the world's eight richest men (< www.oxfam.org/en/pressroom/pressreleases/2017-01-16/just-8-men-own-same-wealth-half-world > (accessed 11 October 2017)).

29 This estimate for 2011 was kindly supplied by Branko Milanovic as an Excel spreadsheet in July 2016.

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• Volume 13, Special Issue 4
• Thomas Pogge (a1)
• DOI: https://doi.org/10.1017/S1744552317000428

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390 Poverty Essay Topic Ideas & Examples

• 📑 Aspects to Cover in a Poverty Essay

Students who learn economics, politics, and social sciences are often required to write a poverty essay as part of their course. While everyone understands the importance of this topic, it can be hard to decide what to write about. Read this post to find out the aspects that you should cover in your essay on poverty.

🏆 Best Poverty Topics & Free Essay Examples

👍 powerful topics on poverty and inequality, 🎓 simple & easy topics related to poverty, 📌 interesting poverty essay examples, ⭐ strong poverty-related topics, 🥇 unique poverty topics for argumentative essay, ❓ research questions about poverty.

Topics related to poverty and inequality might seem too broad. There are so many facts, factors, and aspects you should take into consideration. However, we all know that narrowing down a topic is one of the crucial steps when working on an outline and thesis statement. You should be specific enough to select the right arguments for your argumentative essay or dissertation. Below, you will find some aspects to include in your poverty essay.

Poverty Statistics

First of all, it would be beneficial to include some background information on the issue. Statistics on poverty in your country or state can help you to paint a picture of the problem. Look for official reports on poverty and socioeconomic welfare, which can be found on government websites. While you are writing this section, consider the following:

• What is the overall level of poverty in your country or state?
• Has the prevalence of poverty changed over time? If yes, how and why?
• Are there any groups or communities where poverty is more prevalent than in the general population? What are they?

Causes of Poverty

If you look at poverty essay titles, the causes of poverty are a popular theme among students. While some people may think that poverty occurs because people are lazy and don’t want to work hard, the problem is much more important than that. Research books and scholarly journal articles on the subject with these questions in mind:

• Why do some groups of people experience poverty more often than others?
• What are the historical causes of poverty in your country?
• How is poverty related to other social issues, such as discrimination, immigration, and crime?
• How do businesses promote or reduce poverty in the community?

Consequences of Poverty

Many poverty essay examples also consider the consequences of poverty for individuals and communities. This theme is particularly important if you study social sciences or politics. Here are some questions that may give you ideas for this section:

• How is the psychological well-being of individuals affected by poverty?
• How is poverty connected to crime and substance abuse?
• How does poverty affect individuals’ access to high-quality medical care and education?
• What is the relationship between poverty and world hunger?

Government Policies

Governments of most countries have policies in place to reduce poverty and help those in need. In your essay, you may address the policies used in your state or country or compare several different governments in terms of their approaches to poverty. Here is what you should think about:

• What are some examples of legislation aimed at reducing poverty?
• Do laws on minimum wage help to prevent and decrease poverty? Why or why not?
• How do governments help people who are poor to achieve higher levels of social welfare?
• Should governments provide financial assistance to those in need? Why or why not?

Solutions to Poverty

Solutions to poverty are among the most popular poverty essay topics, and you will surely find many sample papers and articles on this subject. This is because poverty is a global issue that must be solved to facilitate social development. Considering these questions in your poverty essay conclusion or main body will help you in getting an A:

• What programs or policies proved to be effective in reducing poverty locally?
• Is there a global solution to poverty that would be equally effective in all countries?
• How can society facilitate the reduction of poverty?
• What solutions would you recommend to decrease and prevent poverty?

Covering a few of these aspects in your essay will help you demonstrate the in-depth understanding and analysis required to earn a high mark. Before you start writing, have a look around our website for more essay titles, tips, and interesting topics!

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• Cause and Effect of Poverty For example, the disparities in income and wealth are considered as a sign of poverty since the state is related to issues of scarcity and allocation of resources and influence.
• Children Living in Poverty and Education The presence of real subjects like children is a benefit for the future of the nation and a free education option for poor families to learn something new and even use it if their children […]
• Social Issues of Families in Poverty With the tightened budget, parents of the families living in poverty struggle to make ends meet, and in the course of their struggles, they experience many stresses and depressions.
• Poverty Simulation Reflection and Its Influence on Life Something that stood out to me during the process is probably the tremendous emotional and psychological impact of poverty on a person’s wellbeing.
• The Philippines’ Unemployment, Inequality, Poverty However, despite the strong emphasis of the government on income equality and poverty reduction along with the growth of GDP, both poverty and economic and social inequality remain persistent in the Philippines.
• Poverty and Diseases A usual line of reasoning would be that low income is the main cause of health-related problems among vulnerable individuals. Such results that the relationship between mental health and poverty is, in fact, straightforward.
• Community Work: Helping People in Poverty The first project would be water project since you find that in most villages water is a problem, hence $100 would go to establishing this project and it’s out of these water then the women […]
• Poverty Areas and Effects on Juvenile Delinquency The desire to live a better life contributes to the youths engaging in crimes, thus the increase in cases of juvenile delinquencies amid low-income families. The studies indicate that the fear of poverty is the […]
• The End of Poverty Philippe Diaz’s documentary, The End of Poverty, is a piece that attempts to dissect the causes of the huge economic inequalities that exist between countries in the Northern Hemisphere and the Southern Hemisphere.
• Poverty in Rural and Urban Areas My main focus is on articles explaining the sources of poverty in rural and urban areas and the key difference between the two.
• Poverty Effects on Child Development and Schooling To help children from low-income families cope with poverty, interventions touching in the child’s development and educational outcomes are essential. Those programs campaign against the effects of poverty among children by providing basic nutritional, academic, […]
• The Problem of Poverty in Bob Marley’s “No Woman, No Cry” To see the situation from the perspective of its social significance, it is necessary to refer to Mills’ concept of sociological imagination and to the division of problems and issues into personal and social ones.
• Global Poverty: Famine, Affluence, and Morality In the article Famine, Affluence, and Morality, Michael Slote contends that rich people have a moral obligation to contribute more to charities.
• Poverty in Bambara’s The Lesson and Danticat’s A Wall of Fire Rising It is important to note the fact that culture-based poverty due to discrimination of the past or political ineffectiveness of the nation can have a profound ramification in the lives of its victims.
• Aspects of Global Poverty There are arguments that have been put forth in regard to the causes of poverty in various nations with some people saying that the governments in various nations are there to be blamed for their […]
• Consumerism: Affecting Families Living in Poverty in the United States Hence, leading to the arising of consumerism protection acts and policies designed to protect consumers from dishonest sellers and producers, which indicates the high degree of consumer’s ignorance, and hence failure to make decisions of […]
• Poverty and Wealth in “The Lesson” by Toni Cade Bambara This theme contributes to the meaning of “The Lesson” because the narrator illustrates the differences that exist amid the prosperous and poor kids in the fictitious story.
• Poverty and Global Food Crisis: Food and Agriculture Model Her innovative approach to the issue was to measure food shortages in calories as opposed to the traditional method of measuring in pounds and stones.
• Environmental Degradation and Poverty It is however important to understand the causes of the environmental degradation and the ways to reduce them, which will promote the improvement of the environmental quality.
• Poverty in Urban Areas The main reason for escalation of the problem of poverty is urban areas is because the intricate problems of urban poverty are considered too small to attract big policies.
• Is Poverty a Choice or a Generational Curse? The assumption that poverty is a choice persists in public attitudes and allows policy-makers to absolve themselves of any responsibility for ensuring the well-being of the lower socioeconomic stratum of society.
• Intro to Sociology: Poverty It is challenging to pinpoint the actual and not mythological reasons for the presence of poverty in America. The former can be summed up as a “culture of poverty”, which suggests that the poor see […]
• Poverty, Government and Unequal Distribution of Wealth in Philippines The author of the book Poverty And The Critical Security Agenda, Eadie, added: Quantitative analyses of poverty have become more sophisticated over the years to be sure, yet remain problematic and in certain ways rooted […]
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• The Causes of Poverty Concentration in the Modern World Even though the average income of people living in developed countries is above the poverty line, the nations still experience concentrations of poverty especially when it comes to income inequality.
• The Problems of Poverty and Hunger Subsequently, the cause in this case serves as a path to a solution – more social programs are needed, and wealthy citizens should be encouraged to become beneficiaries for the hungry.
• Poverty and Its Effect on Adult Health Poverty in the UK is currently above the world average, as more than 18% of the population lives in poverty. In 2020, 7% of the UK population lived in extreme poverty and 11% lived in […]
• Analysis of a Social Problem: Poverty Furthermore, the World Bank predicts that both the number of people and the percentage of the population living in extreme poverty will increase in 2020 and 2021 due to the coronavirus outbreak.
• Children in Poverty in Kampong Ayer, Brunei Part of the reason is likely malnutrition that results from the eating or consumption patterns of the families and also dependency on the children to help out with the family or house chores.
• Poverty and Hip-Hop: Notorious B.I.G.’s “Juicy” Notorious B.I.G.’s music video for the song “Juicy” was chosen for the analysis because the rapper explored the theme of poverty that deeply affected his life.
• Tourism Contribution to Poverty Reduction Managers usually make targeting errors such as poor delivery of tourism benefits to the poor and accruing tourism benefit to the rich in the society.
• The Connection Between Poverty and Mental Health Problems The daily struggle to earn a daily bread takes a toll on an individual mental health and contributes to mental health problem.
• Freedom from Poverty as a Human Right and the UN Declaration of Human Rights This reveals the nature of the interrelatedness of the whole boy of human rights and the need to address human rights in that context.
• Reflective Analysis of Poverty It can be further classified into absolute poverty where the affected do not have the capability to make ends meet, and relative poverty which refer to the circumstances under which the afflicted do not have […]
• Poor Kids: The Impact of Poverty on Youth Nevertheless, the environment of constant limitations shapes the minds of children, their dreams and the paths they pursue in life, and, most importantly, what they make of themselves.
• Inequality and Poverty Relationship To begin with, it is necessary to define the concepts of poverty and inequality. As of inequality, it is the difference in access to income, power, education, and whatever.
• Poverty and Challenges in Finding Solutions It is obvious, that an ideal solution to the issue of poverty is distribution of these funds between people in need and improvement of current situation.
• African Poverty: To Aid, or Not to Aid In my opinion, granting educational aid to Africa is one of the best strategies required by African economies and eradicates poverty.
• The Myth of the Culture of Poverty Unfortunately, rather all of the stereotypes regarding poor people are widespread in many societies and this has served to further increase the problem of generational poverty. Poor people are regarded to be in the state […]
• Poverty in Saudi Arabia It is expected that through the various facts and arguments presented in this paper.the reason behind the high poverty rate within Saudi Arabia despite its oil wealth as compared to its neighbors will become clear […]
• How Poverty Contributes to Poor Heath The results show that poverty is the main cause of poor health. The study was purposed to assess the effect of poverty in determining the health status of households.
• Global Poverty Project: A Beacon of Hope in the Fight Against Extreme Poverty The organization works with partners worldwide to increase awareness and understanding of global poverty and inspire people to take action to end it.
• The Causes of an Increase in Poverty in Atlanta, Georgia The key causes of the high poverty rise in the city include housing policies and instabilities, the lack of transit services and public transportation infrastructure in suburban areas, and childhood poverty.
• Thistle Farms: Help for Women Who Are Affected by Poverty As I said in the beginning, millions of women need help and assistance from the community to overcome poverty and heal emotional wounds caused by abuse. You can purchase a variety of its home and […]
• Median Household Incomes and Poverty Levels The patterns of poverty in the Denver urban area show that rates are higher in the inner suburb and the core city and lower in the outer suburb.
• Poverty Through a Sociological Lens Poverty-stricken areas, such as slums, rural villages, and places hit by disasters, lack the required economic activities to improve the employment and wealth status of the people.
• Poverty: The American Challenge One of the main problems in the world is the problem of poverty, which means the inability to provide the simplest and most affordable living conditions for most people in a given country.
• The Poverty Issue From a Sociological Perspective The core of the perspective is the idea that poverty is a system in which multiple elements are intertwined and create outcomes linked to financial deficits.
• Saving the Planet by Solving Poverty The data is there to make the necessary links, which are needed when it comes to the economic variations and inadequate environmental impacts of climate change can be distinguished on a worldwide scale.
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• Global Poverty and Ways to Overcome It These are some of the strategies, the subsequent application of which would significantly reduce the level of poverty around the world.
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• Political Economy: Relationship Between Poverty, Inequality, and Nationalism The prevalence of nationalism leads to changes in the education system, as the government tries to justify the superiority of the country by altering the curriculum.
• End of Extreme Poverty Importantly, the ability to remain the owners of a substantial amount of accumulated wealth is the primary motivation for such individuals.
• The Problem of Poverty in the United States The problem of increasing poverty is one of the major political issues in the United States, which became especially agile after the appearance of the COVID-19 pandemic due to the difficult economic situation all over […]
• Poverty and Unemployment Due to Increased Taxation The government on its side defended the move while trying to justify the new measures’ benefits, a move that would still not benefit the country.
• Poverty as a Global Social Problem For example, the research shows that Kibera is the largest slum in the country, and this is where many people move to settle after losing hope of getting employed in towns.
• Researching the Problem of Poverty However, the rich people and the rich countries reduce poverty to some extent by providing jobs and markets to the poor, but the help is too little compared to the benefits they get thus accelerating […]
• Poverty, Social Class, and Intersectionality I prefer the structural approach to the issue as I believe the created structures are responsible for the existence of diverse types of oppression.
• Wealth and Poverty: The Christian Teaching on Wealth and Poverty To illustrate the gap between the world’s richest and the world’s poorest, a recent UN publication reported that the wealth of the three richest persons in the world is greater than the combined wealth of […]
• Guns Do Not Kill, Poverty Does It is widely accepted that stricter gun control policies are instrumental in alleviating the problem, as they are supposed to reduce the rate of firearm-related deaths, limiting gun access to individuals at-risk of participating in […]
• Poverty’s Effects on Delinquency The economic status of people determines their social class and the manner in which they get their basic needs. Seeing these things and the kind of life rich people lead motivates the poor to commit […]
• The Criminalization of Poverty in Canada In this regard, with a special focus on Canada, the objective of this essay is to investigate how public policy has transformed alongside the public perception of social welfare reform.
• The Issue of Vicious Circle of Poverty in Brazil The persistence of poverty, regardless of the many shocks that every state receives in the normal course of its survival, raises the feeling that underdevelopment is a condition of equilibrium and that there are pressures […]
• Community Health Needs: Poverty Generally, the higher the level of poverty, the worse the diet, and hence the higher the chances of developing diabetes. Consequently, a considerable disparity in the prevalence of diabetes occurs between communities with high levels […]
• “Poverty, Race, and the Contexts of Achievement” by Maryah Stella Fram et al. The article “Poverty, race, and the contexts of achievement: examining the educational experience of children in the U.S. Multilevel models were then applied in the analyses of how children varied in their reading scores depending […]
• Microeconomic Perspective on Poverty Evolution in Pakistan The periodic spike in poverty levels, notwithstanding economic growth, implies incongruous policy functionality in relation to drivers of poverty and the subsequent failure to improve the indicators.
• The Impact of Poverty on Children Under the Age of 11 The strengths of the Marxist views on poverty are in the structural approach to the problem. Overall, the Marxist theory offers a radical solution to the problem of child poverty.
• Dependency Theory and “The End of Poverty?” It is also reflected in the film “The End of Poverty?” narrating the circumstances of poor countries and their precondition. It started at the end of the fifteenth century and marked the beginning of the […]
• Poverty Policy Recommendations Different leaders have considered several policies and initiatives in the past to tackle the problem of poverty and empower more people to lead better lives.
• Poverty Reduction and Natural Assets Therefore, the most efficient way to increase the efficiency of agriculture and reduce its environmental impacts is ensuring the overall economic growth in the relevant region.
• Corporate Social Responsibility & Poverty Alleviation Researchers state that “preventing and managing the negative impacts of the core business on the poor” are essential indicators of the social responsibility of the company.
• Health, Poverty, and Social Equity: The Global Response to the Ebola Outbreak Canada and Australia, as well as several countries in the Middle East and Africa, were the most active proponents of this ban, halting the movements for both people and goods from states affected by the […]
• Health, Poverty, and Social Equity: Indigenous Peoples of Canada Another problem that much of northern Canada’s Indigenous Peoples face is the availability of healthcare services and people’s inability to access medical help.
• The Problem of Childhood Poverty Unequal income distribution, adult poverty, government policies that exclude children and premature pregnancy are some of the items from the long list of childhood poverty causes. Before discussing the causes and effects of childhood poverty, […]
• Individualistic Concepts and Structural Views on Poverty in American Society The concepts presented in the book Poverty and power help to better understand the content of the article and the reasons for such a different attitude of people to the same problem.
• Poverty: Causes and Effects on the Population and Country Thesis: There are a great number of factors and issues that lead a certain part of the population to live in poverty and the input that such great numbers of people could provide, would be […]
• The Internet and Poverty in Society The information that can be found on the web is a very useful resource but at the same time it is important to consider several things with the treatment and examination of the presented information.
• Poverty in Africa: Impact of the Economy Growth Rate Thus, a conclusion can be made that economic growth in Africa will result in the social stability of the local population.
• Poverty and Disrespect in “Coming of Age in Mississippi” by Anne Moody Life was not fair to a little Anne the chapters about her childhood are alike to a chain of unfortunate events that happened to her and her relatives.
• Vietnam’s Economic Growth and Poverty & Inequality A significant part of the population was active in employment, and this means that the numerous income-generating activities improved the economy of this country.
• Poverty and Disasters in the United States Focusing on the precaution measures and the drilling techniques that will help survive in case of a natural disaster is one of the most common tools for securing the population.
• The Notion of “Poverty” Is a Key Word of a Modern Society As far as the countries of the Third World are deprived of these possibilities, their development is hampered and the problem of poverty has become a chronic disease of the society.
• The Problem of Poverty in Africa The major aim of the study is to identify the causes of poverty and propose best strategies that can help Africans come out of poverty.
• Poverty Sustainability in Sub-Saharan Countries: The Role of NGOs The position of research and statistics in undertaking social-counting work is not queried. It is after the research method is used in other tribulations of the charity that gaps emerge between management and research.
• “The End of Poverty” by Phillipe Diaz In the film End of Poverty, the filmmaker tries to unravel the mystery behind poverty in the world. The film is arranged in such a way that the author has persuasively argued his case that […]
• The Effects of Poverty Within Criminal Justice The approach used in this study is deductive since the reasoning in the study proceeds from the general principle regarding the fact that poverty has a role to play in the administering of fairness in […]
• The Poverty Rates in the USA Poverty in the U. Officially the rate of poverty was at14.3%.
• Poverty in America: A Paradox Many people especially the young people living in other countries and more so in developed countries wish to immigrate to America instead of working hard to achieve the dream of better opportunities.
• Values and Ethics: Poverty in Canada The case study1 has indicated for instance, that the number of people living in poverty in 2003 is at 4. A group of individuals would therefore be granted the mandate to lead the others in […]
• War and Poverty Connection in Developing Countries The scholars claim that conflict and war in most nations have been found to exacerbate the rate of poverty in the affected nations.
• Poverty and Criminal Behavoiur Relation The level of accuracy that the data collected holds cannot be 100%; there is a level of error that affects the reliability of the data collected.
• Urban Relationship Between Poverty and Crime The areas with high poverty level in the US urban areas have the highest cases of crime but this is inadequate to justify that poverty is the cause of crime.
• Social and Economic Policy Program: Globalization, Growth, and Poverty Topic: Sustainable approaches to poverty reduction through smallholder agricultural development in rural South Africa and Kenya The majority of the poor in Africa, and indeed the whole world, live in rural areas.
• Is Poverty From Developing Countries Imagined? That is why concepts like the “Third World Countries”, the “Second World Countries”, the “First World Countries” and now the “Developing Countries” has been coined.
• How Gender and Race Structure Poverty and Inequality Connected? In essence, feminization of poverty has been constructed in the context of the rise in households headed by female and the family participation in the low income generating activities, thus creating three distinct areas of […]
• Poverty by Anarchism and Marxism Approaches It is important to note that the very different ways in which social scientists approach the study of social phenomena depend to a great extent upon their particular philosophical view of the social world, a […]
• Environmental Deterioration and Poverty in Kenya Poverty is the great cause and consequence or effect of the degradation of the environment and depletion of the resources that pose threats to the present and future growth of the economy.
• Marginalization and Poverty of Rural Women The women are left to take care of the economic welfare of the households. I will also attempt to propose a raft of recommendations to alleviate poverty and reduce marginalization of women in the rural […]
• Pockets of Poverty Mar the Great Promise of Canada
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• Poverty Issue in America Review
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• Poverty and Inequality in Modern World
• Poverty and Its Effects on Women
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• Feminization of Poverty – A Grave Social Concern
• Poverty Level in any Country
• Theories of Fertility. Economics Aspect and Poverty.
• The Cultural Construction of Poverty
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• The Relation Between Poverty and Justice
• Canada and the Imposition of Poverty
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The Social Consequences of Poverty: An Empirical Test on Longitudinal Data

Carina mood.

Institute for Futures Studies, Box 591, 101 31 Stockholm, Sweden

Swedish Institute for Social Research (SOFI), Stockholm University, Stockholm, Sweden

Jan O. Jonsson

Nuffield College, OX1 1NF Oxford, England, UK

Poverty is commonly defined as a lack of economic resources that has negative social consequences, but surprisingly little is known about the importance of economic hardship for social outcomes. This article offers an empirical investigation into this issue. We apply panel data methods on longitudinal data from the Swedish Level-of-Living Survey 2000 and 2010 (n = 3089) to study whether poverty affects four social outcomes—close social relations (social support), other social relations (friends and relatives), political participation, and activity in organizations. We also compare these effects across five different poverty indicators. Our main conclusion is that poverty in general has negative effects on social life. It has more harmful effects for relations with friends and relatives than for social support; and more for political participation than organizational activity. The poverty indicator that shows the greatest impact is material deprivation (lack of cash margin), while the most prevalent poverty indicators—absolute income poverty, and especially relative income poverty—appear to have the least effect on social outcomes.

Introduction

According to the most influential definitions, poverty is seen as a lack of economic resources that have negative social consequences—this is in fact a view that dominates current theories of poverty (Townsend 1979 ; Sen 1983 ; UN 1995 ), and also has a long heritage (Smith 1776 /1976). The idea is that even when people have food, clothes, and shelter, economic problems lead to a deterioration of social relations and participation. Being poor is about not being able to partake in society on equal terms with others, and therefore in the long run being excluded by fellow citizens or withdrawing from social and civic life because of a lack of economic resources, typically in combination with the concomitant shame of not being able to live a life like them (e.g., Sen 1983 ). Economic hardship affects the standard of life, consumption patterns, and leisure time activities, and this is directly or indirectly related to the possibility of making or maintaining friends or acquaintances: poverty is revealed by not having appropriate clothes, or a car; by not being able to afford vacation trips, visits to the restaurant, or hosting dinner parties (e.g., Mack and Lansley 1985 ; Callan et al. 1993 )—in short, low incomes prevent the poor from living a life in “decency” (Galbraith 1958 ).

The relational nature of poverty is also central to the social exclusion literature, which puts poverty in a larger perspective of multiple disadvantages and their interrelationships (Hills et al. 2002 , Rodgers et al. 1995 ; Room 1995 ). While there are different definitions of the social exclusion concept, the literature is characterized by a move from distributional to relational concerns (Gore 1995 ) and by an emphasis on the importance of social integration and active participation in public life. The inability of living a decent or “ordinary” social life may in this perspective erode social networks, social relations, and social participation, potentially setting off a downward spiral of misfortune (Paugam 1995 ) reinforcing disadvantages in several domains of life. This perspective on poverty and social exclusion is essentially sociological: the playing field of the private economy is social. It is ultimately about individuals’ relations with other people—not only primary social relations, with kin and friends, but extending to secondary relations reflected by participation in the wider community, such as in organizations and in political life (UN 1995 ).

Despite the fact that the social consequences of limited economic resources are central to modern perspectives on poverty and marginalization, this relation is surprisingly seldom studied empirically. Qualitative research on the poor give interesting examples on how the negative effects of poverty works, and portray the way that economic problems are transformed into social ones (Ridge and Millar 2011 ; Attree 2006 ). Such studies, however, have too small sample sizes to generalize to the population, and they cannot tell us much about the range of the problem. The (relatively few) studies that have addressed the association between poverty and social outcomes on larger scale tend to verify that the poor have worse social relations (Böhnke 2008 ; Jonsson and Östberg 2004 ; Levitas 2006 ), but Barnes et al. ( 2002 ) did not find any noteworthy association between poverty (measured as relative income poverty, using the 60 %-limit) and social relations or social isolation. Dahl et al. ( 2008 ) found no relation between poverty and friendships, but report less participation in civic organizations among the poor. All these studies have however been limited to cross-sectional data or hampered by methodological shortcomings, and therefore have not been able to address the separation of selection effects from potentially causal ones.

Our aim in this study is to make good these omissions. We use longitudinal data from the Swedish Level of Living Surveys (LNU) 2000 and 2010 to study how falling into poverty, or rising from it, is associated with outcomes in terms of primary and secondary social relations, including participation in civil society. These panel data make it possible to generalize the results to the Swedish adult population (19–65 in 2000; 29–75 in 2010), to address the issue of causality, and to estimate how strong the relation between economic vulnerability and social outcomes is. Because the data provide us with the possibility of measuring poverty in several ways, we are also able to address the question using different—alternative or complementary—indicators. Poverty is measured as economic deprivation (lack of cash margin, self-reported economic problems), income poverty (absolute and relative), and long-term poverty, respectively. The primary, or core, social outcomes are indicated by having social support if needed, and by social relations with friends and relatives. We expand our analysis to secondary, or fringe, social outcomes in terms of participation in social life at large, such as in civil society: our indicators here include the participation in organizations and in political life.

Different Dimensions/Definitions of Poverty

In modern welfare states, the normal take on the issue of poverty is to regard it as the relative lack of economic resources, that is, to define the poor in relation to their fellow citizens in the same country at the same time. Three approaches dominate the scholarly literature today. The first takes as a point of departure the income deemed necessary for living a life on par with others, or that makes possible an “acceptable” living standard—defined as the goods and services judged necessary, often on the basis of consumer or household budget studies. This usage of a poverty threshold is often (somewhat confusingly) called absolute income poverty , and is most common in North America (cf. Corak 2006 for a review), although most countries have poverty lines defined for different kinds of social benefits. In Europe and in the OECD, the convention is instead to use versions of relative income poverty , defining as poor those whose incomes fall well behind the median income in the country in question (European Union using 60 % and OECD 50 % of the median as the threshold). As an alternative to using purchasing power (as in the “absolute” measure), this relative measure defines poverty by income inequality in the bottom half of the income distribution (Atkinson et al. 2002 ; OECD 2008 ).

The third approach argues that income measures are too indirect; poverty should instead be indicated directly by the lack of consumer products and services that are necessary for an acceptable living standard (Mack and Lansley 1985 ; Ringen 1988 ; Townsend 1979 ). This approach often involves listing a number of possessions and conditions, such as having a car, washing machine, modern kitchen; and being able to dine out sometimes, to have the home adequately heated and mended, to have sufficient insurances, and so on. An elaborate version includes information on what people in general see as necessities, what is often termed “consensual” poverty (e.g., Mack and Lansley 1985 ; Gordon et al. 2000 ; Halleröd 1995 ; van den Bosch 2001 ). Other direct indicators include the ability to cover unforeseen costs (cash margin) and subjective definitions of poverty (e.g., van den Bosch 2001 ). The direct approach to poverty has gained in popularity and measures of economic/material deprivation and consensual poverty are used in several recent and contemporary comparative surveys such as ECHP (Whelan et al. 2003 ) and EU-SILC (e.g., UNICEF 2012 ; Nolan and Whelan 2011 ).

It is often pointed out that, due to the often quite volatile income careers of households, the majority of poverty episodes are short term and the group that is identified as poor in the cross-section therefore tends to be rather diluted (Bane and Ellwood 1986 ; Duncan et al. 1993 ). Those who suffer most from the downsides of poverty are, it could be argued, instead the long-term, persistent, or chronically poor, and there is empirical evidence that those who experience more years in poverty also are more deprived of a “common lifestyle” (Whelan et al. 2003 ). Poverty persistence has been defined in several ways, such as having spent a given number of years below a poverty threshold, or having an average income over a number of years that falls under the poverty line (e.g., Duncan and Rodgers 1991 ; Rodgers and Rodgers 1993 ). The persistently poor can only be detected with any precision in longitudinal studies, and typically on the basis of low incomes, as data covering repeated measures of material deprivation are uncommon.

For the purposes of this study, it is not essential to nominate the best or most appropriate poverty measure. The measures outlined above, while each having some disadvantage, all provide plausible theoretical grounds for predicting negative social outcomes. Low incomes, either in “absolute” or relative terms, may inhibit social activities and participation because these are costly (e.g., having decent housing, needing a car, paying membership fees, entrance tickets, or new clothes). Economic deprivation, often indicated by items or habits that are directly relevant to social life, is also a valid representation of a lack of resources. Lastly, to be in long-term poverty is no doubt a worse condition than being in shorter-term poverty.

It is worth underlining that we see different measures of poverty as relevant indicators despite the fact that the overlap between them often is surprisingly small (Bradshaw and Finch 2003 ). The lack of overlap is not necessarily a problem, as different people may have different configurations of economic problems but share in common many of the experiences of poverty—experiences, we argue, that are (in theory at least) all likely to lead to adverse social outcomes. Whether this is the case or not is one of the questions that we address, but if previous studies on child poverty are of any guidance, different definitions of poverty may show surprisingly similar associations with a number of outcomes (Jonsson and Östberg 2004 ).

What are the Likely Social Consequences of Poverty?

We have concluded that poverty is, according to most influential poverty definitions, manifested in the social sphere. This connects with the idea of Veblen ( 1899 ) of the relation between consumption and social status. What you buy and consume—clothes, furniture, vacation trips—in part define who you are, which group you aspire to belong to, and what view others will have of you. Inclusion into and exclusion from status groups and social circles are, in this view, dependent on economic resources as reflected in consumption patterns. While Veblen was mostly concerned about the rich and their conspicuous consumption, it is not difficult to transfer these ideas to the less fortunate: the poor are under risk of exclusion, of losing their social status and identity, and perhaps also, therefore, their friends. It is however likely that this is a process that differs according to outcome, with an unknown time-lag.

If, as outlined above, we can speak of primary and secondary social consequences, the former should include socializing with friends, but also more intimate relations. Our conjecture is that the closer the relation, the less affected is it by poverty, simply because intimate social bonds are characterized by more unconditional personal relations, typically not requiring costs to uphold.

When it comes to the secondary social consequences, we move outside the realm of closer interpersonal relations to acquaintances and the wider social network, and to the (sometimes relatively anonymous) participation in civil or political life. This dimension of poverty lies at the heart of the social exclusion perspective, which strongly emphasizes the broader issues of societal participation and civic engagement, vital to democratic societies. It is also reflected in the United Nation’s definition, following the Copenhagen summit in 1995, where “overall poverty” in addition to lack of economic resources is said to be “…characterized by lack of participation in decision-making and in civil, social, and cultural life” (UN 1995 , p. 57). Poverty may bring about secondary social consequences because such participation is costly—as in the examples of travel, need for special equipment, or membership fees—but also because of psychological mechanisms, such as lowered self-esteem triggering disbelief in civic and political activities, and a general passivity leading to decreased organizational and social activities overall. If processes like these exist there is a risk of a “downward spiral of social exclusion” where unemployment leads to poverty and social isolation, which in turn reduce the chances of re-gaining a footing in the labour market (Paugam 1995 ).

What theories of poverty and social exclusion postulate is, in conclusion, that both what we have called primary and secondary social relations will be negatively affected by economic hardship—the latter supposedly more than the former. Our strategy in the following is to test this basic hypothesis by applying multivariate panel-data analyses on longitudinal data. In this way, we believe that we can come further than previous studies towards estimating causal effects, although, as is the case in social sciences, the causal relation must remain preliminary due to the nature of observational data.

Data and Definitions

We use the two most recent waves of the Swedish Level-of-living Survey, conducted in 2000 and 2010 on random (1/1000) samples of adult Swedes, aged 18–75. 1 The attrition rate is low, with 84 % of panel respondents remaining from 2000 to 2010. This is one of the few data sets from which we can get over-time measures of both poverty and social outcomes for a panel that is representative of the adult population (at the first time point, t 0 )—in addition, there is annual income information from register data between the waves. The panel feature obviously restricts the age-groups slightly (ages 19–65 in 2000; 29–75 in 2010), the final number of analyzed cases being between 2995 and 3144, depending on the number of missing cases on the respective poverty measure and social outcome variable. For ease of interpretation and comparison of effect sizes, we have constructed all social outcome variables and poverty variables to be dichotomous (0/1). 2

In constructing poverty variables, we must balance theoretical validity with the need to have group sizes large enough for statistical analysis. For example, we expand the absolute poverty measure to include those who received social assistance any time during the year. As social assistance recipients receive this benefit based on having an income below a poverty line that is similar to the one we use, this seems justifiable. In other cases, however, group sizes are small but we find no theoretically reasonable way of making the variables more inclusive, meaning that some analyses cannot be carried out in full detail.

Our income poverty measures are based on register data and are thus free from recall error or misreporting, but—as the proponents of deprivation measures point out—income poverty measures are indirect measures of hardship. The deprivation measure is more direct, but self-reporting always carries a risk of subjectivity in the assessment. To the extent that changes in one’s judgment of the economic situation depend on changes in non-economic factors that are also related to social relations, the deprivation measure will give upwardly biased estimates. 3 As there is no general agreement about whether income or deprivation definitions are superior, our use of several definitions is a strength because the results will give an overall picture that is not sensitive to potential limitations in any one measure. In addition, we are able to see whether results vary systematically across commonly used definitions.

Poverty Measures

• Cash margin whether the respondent can raise a given sum of money in a week, if necessary (in 2000, the sum was 12,000 SEK; in 2010, 14,000 SEK, the latter sum corresponding to approximately 1600 Euro, 2200 USD, or 1400 GBP in 2013 currency rates). For those who answer in the affirmative, there is a follow-up question of how this can be done: by (a) own/household resources, (b) borrowing.
• Economic crisis Those who claim that they have had problems meeting costs for rent, food, bills, etc. during the last 12 months (responded “yes” to a yes/no alternative).
• Absolute poverty is defined as either (a) having a disposable family income below a poverty threshold or (b) receiving social assistance, both assessed in 1999 (for the survey 2000) or 2009 (for the survey 2010). The poverty line varies by family type/composition according to a commonly used calculation of household necessities (Jansson 2000 ). This “basket” of goods and services is intended to define an acceptable living standard, and was originally constructed for calculating an income threshold for social assistance, with addition of estimated costs for housing and transport. The threshold is adjusted for changes in the Consumer Price Index, using 2010 as the base year. In order to get analyzable group sizes, we classify anyone with an income below 1.25 times this threshold as poor. Self-employed are excluded because their nominal incomes are often a poor indicator of their economic standard.
• Deprived and income poor A combination of the indicator of economic deprivation and the indicator of absolute poverty. The poor are defined as those who are economically deprived and in addition are either absolute income-poor or have had social assistance some time during the last calendar year.
• Long - term poor are defined as those interviewed in 2010 (2000) who had an equivalized disposable income that fell below the 1.25 absolute poverty threshold (excluding self-employed) or who received social assistance in 2009 (1999), and who were in this situation for at least two of the years 2000–2008 (1990–1998). The long-term poor (coded 1) are contrasted to the non-poor (coded 0), excluding the short-term poor (coded missing) in order to distinguish whether long-term poverty is particularly detrimental (as compared to absolute poverty in general).
• Relative poverty is defined, according to the EU standard, as having a disposable equivalized income that is lower than 60 % of the median income in Sweden the year in question (EU 2005). 4 As for absolute poverty, this variable is based on incomes the year prior to the survey year. Self-employed are excluded.

Social and Participation Outcomes

Primary (core) social relations.

• Social support The value 1 (has support) is given to those who have answered in the positive to three questions about whether one has a close friend who can help if one (a) gets sick, (b) needs someone to talk to about troubles, or (c) needs company. Those who lack support in at least one of these respects are coded 0 (lack of support).
• Frequent social relations This variable is based on four questions about how often one meets (a) relatives and (b) friends, either (i) at ones’ home or (ii) at the home of those one meets, with the response set being “yes, often”, “sometimes”, and “no, never”. Respondents are defined as having frequent relations (1) if they have at least one “often” of the four possible and no “never”, 5 and 0 otherwise.

Secondary (fringe) Social Relations/Participation

• Political participation : Coded 1 (yes) if one during the last 12 months actively participated (held an elected position or was at a meeting) in a trade union or a political party, and 0 (no) otherwise. 6
• Organizational activity : Coded 1 (yes) if one is a member of an organization and actively participate in its activities at least once in a year, and 0 (no) otherwise.

Control Variables

• Age (in years)
• Educational qualifications in 2010 (five levels according to a standard schema used by Statistics Sweden (1985), entered as dummy variables)
• Civil status distinguishes between single and cohabiting/married persons, and is used as a time-varying covariate (TVC) where we register any changes from couple to single and vice versa.
• Immigrant origin is coded 1 if both parents were born in any country outside Sweden, 0 otherwise.
• Labour market status is also used as a TVC, with four values indicating labour market participation (yes/no) in 2000 and 2010, respectively.
• Global self - rated health in 2000, with three response alternatives: Good, bad, or in between. 7

Table  1 shows descriptive statistics for the 2 years we study, 2000 and 2010 (percentages in the upper panel; averages, standard deviations, max and min values in the lower panel). Recall that the sample is longitudinal with the same respondents appearing in both years. This means, naturally, that the sample ages 10 years between the waves, the upper age limit being pushed up from 65 to 75. Both the change over years and the ageing of the sample have repercussions for their conditions: somewhat more have poor health, for example, fewer lack social support but more lack frequent social relations, and more are single in 2010 (where widows are a growing category). The group has however improved their economic conditions, with a sizeable reduction in poverty rates. Most of the changes are in fact period effects, and it is particularly obvious for the change in poverty—in 2000 people still suffered from the deep recession in Sweden that begun in 1991 and started to turn in 1996/97 (Jonsson et al. 2010 ), while the most recent international recession (starting in 2008/09) did not affect Sweden that much.

Table 1

Descriptive statistics of dependent and independent variables in the LNU panel

N for variables used as change variables pertains to non-missing observations in both 2000 and 2010

The overall decrease in poverty masks changes that our respondents experienced between 2000 and 2010: Table  2 reveals these for the measure of economic deprivation, showing the outflow (row) percentages and the total percentages (and the number of respondents in parentheses). It is evident that there was quite a lot of mobility out of poverty between the years (61 % left), but also a very strong relative risk of being found in poverty in 2010 among those who were poor in 2000 (39 vs. 5 % of those who were non-poor in 2000). Of all our respondents, the most common situation was to be non-poor both years (81 %), while few were poor on both occasions (6 %). Table  2 also demonstrates some small cell numbers: 13.3 % of the panel (9.4 % + 3.9 %), or a good 400 cases, changed poverty status, and these cases are crucial for identifying our models. As in many panel studies based on survey data, this will inevitably lead to some problems with large standard errors and difficulties in arriving at statistically significant and precise estimates; but to preview the findings, our results are surprisingly consistent all the same.

Table 2

Mobility in poverty (measured as economic deprivation) in Sweden between 2000 and 2010

Outflow percentage (row %), total percentage, and number of cases (in parentheses). LNU panel 2000–2010

We begin with showing descriptive results of how poverty is associated with our outcome variables, using the economic deprivation measure of poverty. 8 Figure  1 confirms that those who are poor have worse social relationships and participate less in political life and in organizations. Poverty is thus connected with both primary and secondary social relations.

The relation between poverty (measured as economic deprivation) and social relations/participation in Sweden, LNU 2010. N = 5271

The descriptive picture in Fig.  1 does not tell us anything about the causal nature of the relation between poverty and social outcomes, only that such a relation exists, and that it is in the predicted direction: poor people have weaker social relations, less support, and lower levels of political and civic participation. Our task now is to apply more stringent statistical models to test whether the relation we have uncovered is likely to be of a causal nature. This means that we must try to rid the association of both the risk for reverse causality—that, for example, a weaker social network leads to poverty—and the risk that there is a common underlying cause of both poverty and social outcomes, such as poor health or singlehood.

The Change Model

First, as we have panel data, we can study the difference in change across two time-points T (called t 0 and t 1 , respectively) in an outcome variable (e.g., social relations), between groups (i.e. those who changed poverty status versus those who did not). The respondents are assigned to either of these groups on the grounds of entering or leaving poverty; in the first case, one group is non-poor at t 0 but experiences poverty at t 1 , and the change in this group is compared to the group consisting of those who are non-poor both at t 0 and t 1 . The question in focus then is: Do social relations in the group entering poverty worsen in relation to the corresponding change in social relations in the group who remains non-poor? Because we have symmetric hypotheses of the effect of poverty on social outcomes—assuming leaving poverty has positive consequences similar to the negative consequences of entering poverty—we also study whether those who exit poverty improve their social outcomes as compared to those remaining poor. We ask, that is, not only what damage falling into poverty might have for social outcomes, but also what “social gains” could be expected for someone who climbs out of poverty.

Thus, in our analyses we use two different “change groups”, poverty leavers and poverty entrants , and two “comparison groups”, constantly poor and never poor , respectively. 9 The setup comparing the change in social outcomes for those who change poverty status and those who do not is analogous to a so-called difference-in-difference design, but as the allocation of respondents to comparison groups and change groups in our data cannot be assumed to be random (as with control groups and treatment groups in experimental designs), we take further measures to approach causal interpretations.

Accounting for the Starting Value of the Dependent Variable

An important indication of the non-randomness of the allocation to the change and comparison groups is that their average values of the social outcomes (i.e. the dependent variable) at t 0 differ systematically: Those who become poor between 2000 and 2010 have on average worse social outcomes already in 2000 than those who stay out of poverty. Similarly, those who stay in poverty both years have on average worse social outcomes than those who have exited poverty in 2010. In order to further reduce the impact of unobserved variables, we therefore make all comparisons of changes in social outcomes between t 0 and t 1 for fixed t 0 values of both social outcome and poverty status.

As we use dichotomous outcome variables, we get eight combinations of poverty and outcome states (2 × 2 × 2 = 8), and four direct strategic comparisons:

• Poverty leavers versus constantly poor, positive social outcome in 2000 , showing if those who exit poverty have a higher chance of maintaining the positive social outcome than those who stay in poverty
• Poverty leavers versus constantly poor, negative social outcome in 2000 , showing if those who exit poverty have a higher chance of improvement in the social outcome than those who stay in poverty
• Poverty entrants versus never poor, positive social outcome in 2000 , showing if those who enter poverty have a higher risk of deterioration in the social outcome than those who stay out of poverty, and
• Poverty entrants versus never poor, negative social outcome in 2000 , showing if those who enter poverty have a lower chance of improvement in the social outcome.

Thus, we hold the initial social situation and poverty status fixed, letting only the poverty in 2010 vary. 10 The analytical strategy is set out in Table  3 , showing estimates of the probability to have frequent social relations in 2010, for poverty defined (as in Table  2 and Fig.  1 above) as economic deprivation.

Table 3

Per cent with frequent social relations in “comparison” and “change” groups in 2000 and 2010, according to initial value on social relations in 2000 and poverty (measured as economic deprivation) in 2000 and 2010

LNU panel 2000–2010. N = 3083

The figures in Table  3 should be read like this: 0.59 in the upper left cell means that among those who were poor neither in 2000 nor in 2010 (“never poor”, or 0–0), and who had non-frequent social relations to begin with, 59 % had frequent social relations in 2010. Among those never poor who instead started out with more frequent social relations, 90 per cent had frequent social relations in 2010. This difference (59 vs. 90) tells us either that the initial conditions were important (weak social relations can be inherently difficult to improve) or that there is heterogeneity within the group of never poor people, such as some having (to us perhaps unobserved) characteristics that support relation building while others have not.

Because our strategy is to condition on the initial situation in order to minimize the impact of initial conditions and unobserved heterogeneity, we focus on the comparisons across columns. If we follow each column downwards, that is, for a given initial social outcome (weak or not weak social relations, respectively) it is apparent that the outcome is worse for the “poverty entrants” in comparison with the “never poor” (upper three lines). Comparing the change group [those who became poor (0–1)] with the comparison group [never poor (0–0)] for those who started out with weak social relations (left column), the estimated probability of frequent social relations in 2010 is 7 % points lower for those who became poor. Among those who started out with frequent relations, those who became poor have a 17 % points lower probability of frequent relations in 2010 than those who stayed out of poverty.

If we move down Table  3 , to the three bottom lines, the change and comparison groups are now different. The comparison group is the “constantly poor” (1–1), and the change group are “poverty leavers” (1–0). Again following the columns downwards, we can see that the change group improved their social relations in comparison with the constantly poor; and this is true whether they started out with weak social relations or not. In fact, the chance of improvement for those who started off with non-frequent social relations is the most noteworthy, being 33 % units higher for those who escaped poverty than for those who did not. In sum, Table  3 suggests that becoming poor appears to be bad for social relations whereas escaping poverty is beneficial.

Expanding the Model

The model exemplified in Table  3 is a panel model that studies change across time within the same individuals, conditioning on their initial state. It does away with time-constant effects of observed and unobserved respondent characteristics, and although this is far superior to a cross-sectional model (such as the one underlying Fig.  1 ) there are still threats to causal interpretations. It is possible (if probably unusual) that permanent characteristics may trigger a change over time in both the dependent and independent variables; or, put in another way, whether a person stays in or exits poverty may be partly caused by a variable that also predicts change in the outcome (what is sometimes referred to as a violation of the “common trend assumption”). In our case, we can for example imagine that health problems in 2000 can affect who becomes poor in 2010, at t 1 , and that the same health problems can lead to a deterioration of social relations between 2000 and 2010, so even conditioning on the social relations at t 0 will not be enough. This we handle by adding control variables, attempting to condition the comparison of poor and non-poor also on sex, age, highest level of education (in 2010), immigrant status, and health (in 2000). 11

Given the set-up of our data—with 10 years between the two data-points and with no information on the precise time ordering of poverty and social outcomes at t 1 , the model can be further improved by including change in some of the control variables. It is possible, for example, that a non-poor and married respondent in 2000 divorced before 2010, triggering both poverty and reduced social relations at the time of the interview in 2010. 12 There are two major events that in this way may bias our results, divorce/separation and unemployment (because each can lead to poverty, and possibly also affect social outcomes). We handle this by controlling for variables combining civil status and unemployment in 2000 as well as in 2010. To the extent that these factors are a consequence of becoming poor, there is a risk of biasing our estimates downwards (e.g., if becoming poor increases the risk of divorce). However, as there is no way to distinguish empirically whether control variables (divorce, unemployment) or poverty changed first we prefer to report conservative estimates. 13

Throughout, we use logistic regression to estimate our models (one model for each social outcome and poverty definition). We create a dummy variable for each of the combinations of poverty in 2000, poverty in 2010 and the social outcome in 2000, and alternate the reference category in order to get the four strategic comparisons described above. Coefficients do thus express the distance between the relevant change and comparison groups. The coefficients reported are average marginal effects (AME) for a one-unit change in the respective poverty variable (i.e. going from non-poor to poor and vice versa), which are straightforwardly interpretable as percentage unit differences and (unlike odds ratios or log odds ratios) comparable across models and outcomes (Mood 2010 ).

Regression Results

As detailed above, we use changes over time in poverty and social outcomes to estimate the effects of interest. The effect of poverty is allowed to be heterogeneous, and is assessed through four comparisons of the social outcome in 2010 (Y 1 ):

• Those entering poverty relative to those in constant non-poverty (P 01  = 0,1 vs. P 01  = 0,0) when both have favourable social outcomes at t 0 (Y 0  = 1)
• Those exiting poverty relative to those in constant poverty (P 01  = 1,0 vs. P 01  = 1,1) when both have favourable social outcomes at t 0 (Y 0  = 1)
• Those entering poverty relative to those in constant non-poverty (P 01  = 0,1 vs. P 01  = 0,0) when both have non-favourable social outcomes at t 0 (Y 0  = 0)
• Those exiting poverty relative to those in constant poverty (P 01  = 1,0 vs. P 01  = 1,1) when both have non-favourable social outcomes at t 0 (Y 0  = 0)

Poverty is a rare outcome, and as noted above it is particularly uncommon to enter poverty between 2000 and 2010 because of the improving macro-economic situation. Some of the social outcomes were also rare in 2000. This unfortunately means that in some comparisons we have cell frequencies that are prohibitively small, and we have chosen to exclude all comparisons involving cells where N < 20.

The regression results are displayed in Table  4 . To understand how the estimates come to be, consider the four in the upper left part of the Table (0.330, 0.138, −0.175 and −0.065), reflecting the effect of poverty, measured as economic deprivation, on the probability of having frequent social relations. Because these estimates are all derived from a regression without any controls, they are identical (apart from using three decimal places) to the percentage comparisons in Table  3 (0.33, 0.14, −0.17, −0.07), and can be straightforwardly interpreted as average differences in the probability of the outcome in question. From Table  4 it is clear that the three first differences are all statistically significant, whereas the estimate −0.07 is not (primarily because those who entered poverty in 2010 and had infrequent social relations in 2000 is a small group, N = 25).

Table 4

Average marginal effects (from logistic regression) of five types of poverty (1–5) on four social outcomes (A-D) comparing those with different poverty statuses in 2000 and 2010 and conditioning on the starting value of the social outcome (in 2000)

Right columns control for sex, education, age, immigrant status, health in 2000, civil status change between 2000 and 2010, and unemployment change between 2000 and 2010. P values in parentheses. Excluded estimates involve variable categories with N < 20. Shaded cells are in hypothesized direction, bold estimates are statistically significant ( P  < 0.05). N in regressions: 1A: 3075; 1B: 3073; 1C: 3075; 1D: 3069; 2A: 3144; 2B: 3137; 2C: 3144; 2D: 3130; 3A: 3074, 3B: 3072; 3C: 3074; 3D: 3068; 4A: 2995; 4B: 2988; 4C: 2995; 4D: 2981; 5A: 3128; 5B: 3121; 5C: 3128; 5D: 3114

In the column to the right, we can see what difference the controls make: the estimates are reduced, but not substantially so, and the three first differences are still statistically significant.

The estimates for each social outcome, reflecting the four comparisons described above, support the hypothesis of poverty affecting social relations negatively (note that the signs of the estimates should differ in order to do so, the upper two being positive as they reflect an effect of the exit from poverty, and the lower two being negative as they reflect an effect of entering poverty). We have indicated support for the hypothesis in Table  4 by shading the estimates and standard errors for estimates that go in the predicted direction.

Following the first two columns down, we can see that there is mostly support for the hypothesis of a negative effect of poverty, but when controlling for other variables, the effects on social support are not impressive. In fact, if we concentrate on each social outcome (i.e., row-wise), one conclusion is that, when controlling for confounders, there are rather small effects of poverty on the probability of having access to social support. The opposite is true for political participation, where the consistency in the estimated effects of poverty is striking.

If we instead follow the columns, we ask whether any of the definitions of poverty is a better predictor of social outcomes than the others. The measure of economic deprivation appears to be the most stable one, followed by absolute poverty and the combined deprivation/absolute poverty variable. 14 The relative poverty measure is less able to predict social outcomes: in many instances it even has the non-expected sign. Interestingly, long-term poverty (as measured here) does not appear to have more severe negative consequences than absolute poverty in general.

Because some of our comparison groups are small, it is difficult to get high precision in the estimates, efficiency being a concern particularly in view of the set of control variables in Table  4 . Only 14 out of 62 estimates in models with controls are significant and in the right direction. Nonetheless, with 52 out of 62 estimates in these models having the expected sign, we believe that the hypothesis of a negative effect of poverty on social outcomes receives quite strong support.

Although control variables are not shown in the table, one thing should be noted about them: The reduction of coefficients when including control variables is almost exclusively driven by changes in civil status. 15 The time constant characteristics that are included are cross-sectionally related to both poverty and social outcomes, but they have only minor impacts on the estimated effects of poverty. This suggests that the conditioning on prior values of the dependent and independent variables eliminates much time invariant heterogeneity, which increases the credibility of estimates.

Conclusions

We set out to test a fundamental, but rarely questioned assumption in dominating definitions of poverty: whether shortage of economic resources has negative consequences for social relations and participation. By using longitudinal data from the Swedish Level-of-living Surveys 2000 and 2010, including repeated measures of poverty (according to several commonly used definitions) and four social outcome variables, we are able to come further than previous studies in estimating the relation between poverty and social outcomes: Our main conclusion is that there appears to be a causal relation between them.

Panel models suggest that falling into poverty increases the risk of weakening social relations and decreasing (civic and political) participation. Climbing out of poverty tends to have the opposite effects, a result that strengthens the interpretation of causality. The sample is too small to estimate the effect sizes with any precision, yet they appear to be substantial, with statistically significant estimates ranging between 5 and 21 % units.

While these findings are disquieting insofar as poverty goes, our results also suggest two more positive results. First, the negative effects of poverty appear to be reversible: once the private economy recovers, social outcomes improve. Secondly, the negative consequences are less for the closest social relations, whether there is someone there in cases of need (sickness, personal problems, etc.). This is in line with an interpretation of such close relations being unconditional: our nearest and dearest tend to hang on to us also in times of financial troubles, which may bolster risks for social isolation and psychological ill-being,

Our finding of negative effects of poverty on civic and political participation relates to the fears of a “downward spiral of social exclusion”, as there is a risk that the loss of less intimate social relations shrinks social networks and decreases the available social capital in terms of contacts that can be important for outcomes such as finding a job (e.g., Lin 2001 ; Granovetter 1974 ). However, Gallie et al. ( 2003 ) found no evidence for any strong impact of social isolation on unemployment, suggesting that the negative effects on social outcomes that we observe are unlikely to lead to self-reinforcement of poverty. Nevertheless, social relations are of course important outcomes in their own right, so if they are negatively affected by poverty it matters regardless of whether social relations in turn are important for other outcomes. Effects on political and civic participation are also relevant in themselves beyond individuals’ wellbeing, as they suggest a potentially democratic problem where poor have less of a voice and less influence on society than others.

Our results show the merits of our approach, to study the relation between poverty and social outcomes longitudinally. The fact that the poor have worse social relations and lower participation is partly because of selection. This may be because the socially isolated, or those with a weaker social network, more easily fall into poverty; or it can be because of a common denominator, such as poor health or social problems. But once we have stripped the analysis of such selection effects, we also find what is likely to be a causal relation between poverty and social relations. However, this effect of poverty on social outcomes, in turn, varies between different definitions of poverty. Here it appears that economic deprivation, primarily indicated by the ability of raising money with short notice, is the strongest predictor of social outcomes. Income poverty, whether in absolute or (particularly) relative terms, are weaker predictors of social outcomes, which is interesting as they are the two most common indicators of poverty in existing research.

Even if we are fortunate to have panel data at our disposal, there are limitations in our analyses that render our conclusions tentative. One is that we do not have a random allocation to the comparison groups at t 0 ; another that there is a 10-year span between the waves that we analyze, and both poverty and social outcomes may vary across this time-span. We have been able to address these problems by conditioning on the outcome at t 0 and by controlling for confounders, but in order to perform more rigorous tests future research would benefit from data with a more detailed temporal structure, and preferably with an experimental or at least quasi-experimental design.

Finally, our analyses concern Sweden, and given the position as an active welfare state with a low degree of inequality and low poverty rates, one can ask whether the results are valid also for other comparable countries. While both the level of poverty and the pattern of social relations differ between countries (for policy or cultural reasons), we believe that the mechanisms linking poverty and social outcomes are of a quite general kind, especially as the “costs for social participation” can be expected to be relative to the general wealth of a country—however, until comparative longitudinal data become available, this must remain a hypothesis for future research.

1 http://www.sofi.su.se/english/2.17851/research/three-research-departments/lnu-level-of-living .

2 We have tested various alternative codings and the overall pattern of results in terms of e.g., direction of effects and differences across poverty definitions are similar, but more difficult to present in an accessible way.

3 Our deprivation questions are however designed to reduce the impact of subjectivity by asking, e.g., about getting a specified sum within a specified time (see below).

4 In the equivalence scale, the first adult gets a weight of one, the second of 0.6, and each child gets a weight of 0.5.

5 We have also tried using single indicators (either a/b or i/ii) without detecting any meaningful difference between them. One would perhaps have assumed that poverty would be more consequential for having others over to one’s own place, but the absence of support for this can perhaps be understood in light of the strong social norm of reciprocity in social relations.

6 We have refrained from using information on voting and membership in trade unions and political parties, because these indicators do not capture the active, social nature of civic engagement to the same extent as participation in meetings and the holding of positions.

7 We have also estimated models with a more extensive health variable, a s ymptom index , which sums responses to 47 questions about self-reported health symptoms. However, this variable has virtually zero effects once global self-rated health is controlled, and does not lead to any substantive differences in other estimates. Adding the global health measure and the symptom index as TVC had no effect either.

8 Using the other indicators of poverty yields very similar results, although for some of those the difference between poor and non-poor is smaller.

9 We call these comparison groups ”never poor” and ”constantly poor” for expository purposes, although their poverty status pertains only to the years 2000 and 2010, i.e., without information on the years in between.

10 With this design we allow different effects of poverty on improvement versus deterioration of the social outcome. We have also estimated models with a lagged dependent variable, which constrains the effects of poverty changes to be of the same size for deterioration as for improvement of the social outcome. Conclusions from that analysis are roughly a weighted average of the estimates for deterioration and improvement that we report. As our analyses suggest that effects of poverty differ in size depending on the value of the lagged dependent variable (the social outcome) our current specification gives a more adequate representation of the process.

11 We have also tested models with a wider range of controls for, e.g., economic and social background (i.e. characteristics of the respondent’s parents), geography, detailed family type and a more detailed health variable, but none of these had any impact on the estimated poverty effects.

12 It is also possible that we register reverse causality, namely if worsening social outcomes that occur after t 0 lead to poverty at t 1 . This situation is almost inevitable when using panel data with no clear temporal ordering of events occurring between waves. However, reverse causality strikes us, in this case, as theoretically implausible.

13 We have also estimated models controlling for changes in health, which did not change the results.

14 If respondents’ judgments of the deprivation questions (access to cash margin and ability to pay rent, food, bills etc.) change due to non-economic factors that are related to changes in social relations, the better predictive capacity of the deprivation measure may be caused by a larger bias in this measure than in the (register-based) income measures.

15 As mentioned above, this variable may to some extent be endogenous (i.e., a mediator of the poverty effect rather than a confounder), in which case we get a downward bias of estimates.

Contributor Information

Carina Mood, Phone: +44-8-402 12 22, Email: [email protected] .

Jan O. Jonsson, Phone: +44 1865 278513, Email: [email protected] .

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What do Leonardo DiCaprio, Pope Francis, and the United Nations Special Rapporteur on extreme poverty and human rights have in common?

They’ve all used their platforms to highlight the link between poverty and climate change—and said we can't solve one without addressing the other.

Pope Francis has  called the global failure to act on climate change “a brutal act of injustice toward the poor," while DiCaprio wisely pointed out “the environment and the fight for the world’s poor are inherently linked." Philip Alston, the UN rapporteur, said in 2019 that a "climate apartheid" is right around the corner.

Climate change looms over all countries, promising severe droughts, supercharged storms, and blistering heat waves. But these consequences are unevenly felt around the world. 

Above all, they threaten the most vulnerable populations across the globe.

“Climate change is going to amplify the already existing divide between those who have resources and those who do not,” Eliot Levine, director of the environment technical support Unit at Mercy Corps, told Global Citizen.

“We are already seeing the impacts of climate change around the world, and the latest IPCC reports clearly illustrate that we are very quickly heading towards experiencing them at a greater scale and degree of severity than we had previously understood," he added.   

As global temperatures and sea levels rise, as the oceans acidify and precipitation patterns get rearranged, people living in poverty are the most severely impacted. Since climate change affects everything from where a person can live to their access to health care, millions of people could be plunged further into poverty as environmental conditions worsen. 

This is especially true for poor people living in low-income countries. Just as climate change deepens inequalities within a country, it also further stratifies international relations because some nations are more threatened by it than others . And poor countries have fewer resources to deal with the problem. 

“The world’s poorest communities often live on the most fragile land, and they are often politically, socially, and economically marginalized, making them especially vulnerable to the impacts of climate change,” Christina Chan, director of the World Resource Institute’s Climate Resilience Practice, told Global Citizen. “More frequent and intense storms, flooding, drought, and changes in rainfall patterns are already impacting these communities, making it difficult for them to secure decent livelihoods.”

Climate Refugees

Evan Mandino, right, sits with neighbors on a couch outside their destroyed homes as sun sets in the aftermath of Hurricane Maria, in Yabucoa, Puerto Rico, Sept. 26, 2017. Image: Gerald Herbert/AP

In 2017, Hurricane Maria slammed into Puerto Rico, becoming the deadliest hurricane in recent US history . 

More than two years later, the island is still recovering from the disaster . Homes need to be repaired and rebuilt, water supplies have not been fully restored, schools and hospitals remain shuttered, and the island’s economy has been heavily disrupted. 

Throughout Puerto Rico, the poorest communities were hit the hardest and are the furthest away from recovery. While many wealthy people left the island or used their resources to rebuild after the disaster, poor families have had to wait months or years for assistance from an underfunded relief effort . 

This pattern has played out around the world in recent years — an unusually powerful storm makes landfall, causes catastrophic harm, and deepens inequalities. 

And it’s a pattern that will only become more common, according to experts. 

Coastal communities hold an estimated 37% of the global population — they’re hubs of commerce and culture, and have fueled global development. Yet, for all their historic significance, these environments could be emptied out in the decades ahead as natural disasters intensify and sea levels rise. 

More than 570 coastal cities could be affected by sea level rise by 2050. In that same period, as many as 1 billion people could be displaced by environmental hazards—primarily sea level rise and natural disasters. Displacement can push a person into poverty by stripping them of their home, profession, and networks. Many people who are displaced are unable to carry their former wealth into their new contexts and struggle to find work and regain their stability.

An estimated 100 million people living in developing countries could be pushed into poverty by climate change by 2030 . 

“Not only are people within these contexts ill equipped to adequately prepare for these extreme events, but they’re also ill equipped to recover from them afterwards,” Levine said.

Some cities, such as Jakarta, have proposed a “managed retreat” to avoid sudden displacements. The Indonesian capital, with a population of more than 10 million, has decided to relocate to the North of the country instead of trying to mitigate the climate risks it faces. In the meantime, hundreds of thousands of people from the city, particularly those living in slums, have already been displaced by storms and sea level rise. 

People are being displaced by drier phenomena as well. Farmers throughout sub-Saharan Africa have had to abandon their land due to devastating droughts in recent years. Rising temperatures, meanwhile, are forcing an untold number of people around the world to pack up and leave their homes.  

The surge in refugees arriving from Central America to the US has also gone up  in part due to soaring temperatures and droughts that have pushed farmers off their land. 

To make matters worse, countries around the world are becoming more hostile to migrants and refugees , a problem that could get considerably worse as the number of those displaced by environmental factors grows. 

Food and Water Scarcity

Ethiopia has been experiencing historic droughts, which has led to water scarcity and food insecurity for millions. Ethiopia has been experiencing historic droughts, which has led to water scarcity and food insecurity for millions. Image: Mulugenta Ayene/UNICEF

For the first time in years, world hunger rose in 2019 . 

The sharpest increase was seen in sub-Saharan Africa, where years of severe drought has ruined agricultural output. 

In Zimbabwe, where more than 7 million people require food aid , the 2019 harvest was half as large as the year before, and this year’s harvest is on track to be similarly diminished. 

In Southern Africa alone, more than 45 million people face food shortages .  

Crop yields vary from year to year for all sorts of reasons — lack of resources and technology, economic downturns, conflict, and political dysfunction. But climate change is a particularly disruptive variable that’s reshaping food production around the world, threatening up to half a billion people with poverty and food insecurity.  

Droughts have become ruinously prolonged in sub-Saharan Africa, for instance, a shift that has caused widespread crop failures, cattle deaths, food shortages, and poverty. 

Similar agricultural disruptions are occurring around the world, with similar economic consequences. Agricultural output could decline by as much as 30% in the years ahead , threatening the livelihoods of 500 million smallholder farmers at a time when the demand for food is expected to rise by up to 98% by 2050 . 

“The disruptions that climate change brings to agricultural producers and their ability to put food on the table is immense and growing rapidly," Levine said. “It’s also affecting their ability to produce foods that provide a balanced set of nutritional components. That was hard enough without climate change, and now there’s this added layer of complexity.”

Droughts intensified by climate change are putting immense pressure on the world’s freshwater supplies. Already, 1 in 4 people around the world face dire water shortages . By 2050, it's predicted, as many as 50% of people could face water shortages . 

In recent years, major cities like São Paulo and Cape Town have almost entirely run out of water, giving the world a peek into a future where fierce water rationing becomes the norm. 

In Cape Town, for instance, water police were deputized to patrol neighborhoods and crack down on wanton water use. 

Water shortages also threaten regional security in parts of the world. The war in Syria  has been partly blamed on a drought that caused rural workers to migrate to urban areas in search of opportunity. The ensuing lack of opportunity led to mass protests and unrest that eventually helped trigger the war. 

“You already see contentious discussions around water between nations with existing national and international policies and processes in place,” Levine said. “What happens when these discussions amplify in places where there are not international agreements around water use? How do you ensure there is equitable distribution of water when there’s not even domestic rules, let alone international agreements?”

Air Pollution

Wildfires rage under plumes of smoke in Bairnsdale, Australia on Dec. 30, 2019. Wildfires rage under plumes of smoke in Bairnsdale, Australia on Dec. 30, 2019. Image: Glen Morey/AP

The ongoing forest fires in Australia have caused tens of thousands of people to flee their homes. But escaping the flames didn't put people out of harm's way. Those who managed to flee are still being affected by the intense pollution being released into the air . 

Forest fires are increasing in frequency and severity because of climate change and they’re harming the health of millions of people annually. All forms of air pollution, including from factories and vehicles, lead to an estimated 8.79 million premature deaths each year .

Air pollution disproportionately affects impoverished people who live in densely packed areas, close to industrial sites, and are unable to afford purifiers or trips away from their homes when the air becomes especially toxic. Low- and middle-income countries account for nearly 92% of all pollution-related deaths. 

Forest fires are increasingly corroding gains that have been made in air quality.

In Brazil, the 2019 fires in the Amazon rainforest made the air poisonous for children , according to the World Health Organization. 

Climate change affects people’s health in other ways, too. Deadly heat waves are becoming more common in parts of the world, creating conditions that endanger even healthy people . These heat waves, while felt universally, primarily threaten people in poverty who are unable to afford air conditioners and protection from water shortages. 

“Beyond a certain point it becomes almost impossible to adapt [to climate change],” said Mahir Ilgaz, associate director of advocacy and campaigns at 350.org. “We’ve seen in places like Mumbai, temperatures are fast approaching conditions that are inhospitable to human habitation."

Rising temperatures are also expanding the ranges of pests like mosquitoes that carry life-threatening diseases , such as malaria, that have historically impacted people living in poverty. 

Water- and food-borne diseases are becoming more common too as increased flooding from extreme precipitation events causes pollution in waterways and farmland .   

The growing health problems associated with climate change are magnified by the lack of health care around the world, especially in poor communities. An estimated 1 in 5 countries have a health care plan for coping with climate change, according to the United Nations  (UN).  

Meanwhile, more than half of the global population doesn’t have reliable access to health care, and nearly 100 million people are pushed into poverty every year because of health issues, according to the World Bank . 

Endangered Livelihoods

Image: Joseph Hunkins

Smallholder farmers depend on their crops for both food and income. When droughts, natural disasters, or some other climate change-related event push them off their land, they often sink deeper into poverty.

In wealthy countries, insurance acts as a safety net for farmers, allowing them to cope with bad crop yields and recover from disasters in a timely manner. Farmers in low-income countries, meanwhile, often don’t have this support.

“Recovery for them means a longer, harder, more dangerous process,” Levine said.

The same goes for small-scale fisheries in developing countries who depend on their daily catch to get by. 

Climate change is heating up the oceans far faster than land environments, destabilizing marine ecosystems, and causing fish populations to migrate. All of this makes it harder for fishers to meet their quotas.

Livelihoods tied to subsistence — like farmers and fishermen in developing countries — are threatened by climate change and the people who fall into these categories often don’t have the resources to become climate resilient. 

Farming and fishing are just two professions, but they represent hundreds of millions of people worldwide . In many countries, agriculture is the primary engine of the economy, with fishing being a major source of commerce as well.

The economic shocks created by climate change will be disruptive. Poor families will struggle to accommodate the rising costs of food and water associated with droughts and natural disasters, according to the World Bank . 

Climate change is also expensive for developing countries that have to redirect budgets to cope with environmental crises. In 2019, countries collectively spent $150 billion on climate change-related disasters , and that’s not even accounting for funds spent on updating infrastructure and creating climate resilience.

The money spent dealing with climate change also means less money spent on health care, education, job training, and other poverty reduction initiatives. 

The Way Forward

The fight against climate change and poverty are intertwined. Investments made to mitigate or adapt to climate change will inevitably reduce poverty, and investments made to reduce poverty will better protect people against the growing environmental crisis.

Countries can distribute hardier and more nutritious seeds to farmers, while providing them access to loans, grants, markets, technologies, and data that can boost harvests, according to the WRI . 

They can invest in reforestation and coastline restoration projects to improve water security, protect communities from natural disasters, and create economic opportunities. 

Above all, countries can reduce greenhouse gas emissions and transition to clean energy economies to prevent climate change from escalating in the future. Switching from fossil fuels to clean energy sources could add upwards of $26 trillion to the global economy by 2030 . 

“Dismantling the pillars of support for the fossil fuel industry is crucial,” Ilgaz said. “It takes many shapes — divestment, cutting subsidies for infrastructure investments. The starting point should be keeping fossil fuels in the ground.”

Organizations like the Green Climate Fund and the International Fund for Agricultural Development are working to both prepare communities for increasing climate risks and enable them to thrive in changing climates. 

Ilgaz said that countries need to develop just transition plans that help people working in industries dependent on fossil fuels find new sources of income and stability. These just transition plans must also reimagine humanity’s relationship to nature and the overexploitation of natural resources , he said.

“Climate change is not an isolated issue, it’s linked to a larger ecological crisis that we see more and more these days,” Ilgaz added.  

Crucially, these efforts have to involve the input of local stakeholders. 

“While communities are at the frontlines of climate change impacts, they rarely have an effective voice in prioritizing, decision-making, and implementing the actions that most affect them,” said Chan of WRI. “In terms of interventions, none may be more important than increasing the volume of devolved and decentralized funding available to local governments, community-based organizations, and others working at the local level to identify, prioritize, implement, and monitor climate adaptation solutions.”

Levine stressed that inadequate financing is the main thing preventing climate resilience programs from taking off in vulnerable areas.

“We could talk about water security, early warning systems, and smart agriculture, but none of these things are going to be a reality if we don’t increase funding,” he said. “If we don’t ensure funds get to the ground, if we don’t have the ability to put strategies into place, then the conversation is moot.” 

Global Citizen Explains

Defend the Planet

Why Climate Change and Poverty Are Inextricably Linked

Feb. 19, 2020