The plight of poverty has long been recognized as one of the main calamities keeping people from living a safe, healthy, long, and fulfilling life. It represents a violation of human dignity and the denial of choices and opportunities. What is more, the hysteresis effect of poverty means that the opportunities denied to the poor will in turn result in a lesser access of the poor to other opportunities.
The international community has committed long ago to eradicating poverty. This commitment has materialzed, for example, in the Millenium Development Goals and the Sustainable Development Goals. Sadly, despite great progress during the past decades, the Covid-19 pandemic and other shocks wreaked havoc and an unacceptable number of people still live in extreme poverty around the world today.
Poverty is multidimensional, and although we tend to focus on monetary poverty, there are other forms of poverty to consider. This blog presents key figures on monetary and non-monetary poverty around the world, casting light on populations and workers still left behind in our quest for sustainable development.
Monetary poverty rates: People historically left behind are still left behind
We have made great progress in poverty reduction in the last several decades. In fact, in 1981, 43.9 per cent of the world population lived in extreme poverty (on less than $2.15 per day). This share had already gone down to 32.5 per cent by 1995, continuing its decrease to reach 8.8 per cent in 2019, prior to the Covid-19 pandemic.
The pandemic and other shocks have severely impacted poverty reduction efforts, with the global poverty rate increasing for the first time in decades in 2020, to 9.7 per cent. This implied that an additional 73.5 million people lived in extreme poverty in 2020 compared to the year before.
It took us until 2023 to regain pre-pandemic levels globally. By 2024, 8.6 per cent of people around the globe lived in extreme poverty, which amounted to 691.8 million people.
Similar trends are observed with higher poverty lines of $3.65 per day and $6.85 per day. The poverty rates using these lines have significantly dropped since the mid-1990s until 2020, when they suddenly increased for the first time in decades. By 2022 however, the global poverty rates based on these two higher poverty lines were already lower than pre-pandemic levels. In 2024, 1.7 billion people were living on less than $3.65 per day, and 3.5 billion people were living on less than $6.85 per day. With 75 per cent of the global population living in middle-income countries today compared to 27 per cent in 1990, the higher poverty lines gained in analytical relevance.
The recent trends in global poverty rates according to different poverty lines suggest that the poorest of the poor are the most vulnerable to shocks, and the ones for whom the impact is strongest and most lasting.
Poverty (both extreme and moderate) affects some regions much more than others. In fact, in 2024, while the extreme poverty rate for Sub-Saharan Africa reached 36.5 per cent, it was under 1 per cent for Europe and Central Asia and East Asia and Pacific. Using the higher poverty line of $6.85 per day, in 2024, the vast majority of people in Sub-Saharan Africa (87.3 per cent) lived in poverty.
Indeed, while Sub-Saharan Africa concentrated in 2024 only 15.7 per cent of the world’s population, it was home to 67.1 per cent of the world’s extremely poor population, and 31.5 per cent of the world’s population living on less than $6.85 per day.
The pledge made by the international community in the SDGs was not only to eradicate poverty, but also and especially, to leave no one behind. This makes it all the more frustrating to realize that, to this date, 22 whole countries are blatantly being left behind. These 22 countries have systematically been low-income countries since at least the late 1980s. Back then, there were 51 countries classified as low-income, most of which have since managed to leap to lower-middle income and some even upper-middle income categories. The 22 countries that remain low-income since then were initially poorer than the low-income countries that eventually escaped that status. In other words, GDP per capita has stalled for over three decades in these 22 countries, while it has been growing in the rest of the world.
Monetary working poverty: Jobs do not always protect workers from poverty
There may be different factors keeping people in monetary poverty, including situations preventing them from accessing employment such as old age, sickness, disability, or domestic and care responsibilities, with insufficient or no social protection benefits or assistance. Since poverty is measured at the household level, the household composition also has an impact. Households with more household members of prime-active age and less children and seniors will fare better in escaping poverty in contexts with little to no social protection.
Working poverty is especially pernicious since it reflects the situation of people who, despite being employed, still live in poverty. In other words, their employment income is not enough to lift them and their families out of poverty, pointing to serious deficits in job quality (and perhaps an unfavourable household composition in terms of the ratio of active to dependents).
In line with the great progress achieved in poverty reduction during the past several decades, the global working poverty rate has also dropped significantly, falling from 37.4 per cent in 1991 to 6.9 per cent in 2024 based on the extreme poverty line ($2.15 per day), and falling from 56.6 per cent in 1991 to 17.5 per cent in 2024 based on the poverty line of $3.65 per day.
The global working poverty rate is consistently smaller than the global poverty rate, meaning that poverty is less prevalent among the employed than those not employed. In other words, employment does provide a certain protection against poverty. However, this is not so reassuring since the difference is modest (less than 2 percentage points in 2024), albeit the impact of employment in lifting people from poverty seems to have increased (there was virtually no gap in 1991).
Just like poverty, working poverty is also unequally distributed across the globe, being mostly an African phenomenon. Indeed, in 2024, while Africa was home to only 15.6 per cent of the world’s employed, it was home to around 66.6 per cent of the employed in extreme poverty, and while Sub-Saharan Africa was home to only 13.6 per cent of the world’s employed, it was home to around 65.1 per cent of the employed in extreme poverty.
Holding one job (and no more than one) remains the norm, both for employed men and employed women around the world. If all jobs were decent jobs, holding multiple jobs would be a choice and never a necessity. Indeed, multiple job-holding often appears as a necessary strategy against poverty. Unfortunately, this strategy is not always efficient (and particularly, not everywhere).
The working poverty rate (including extreme and moderate poverty) is higher among the employed holding one job than among multiple job-holders in 66 per cent of countries with data, but in 90 per cent of high-income countries with data, 73 per cent of upper-middle income countries with data, and only 31 per cent of low and lower-middle income countries with data.
In plain language, job quality and especially pay are so inadequate in the poorest countries that not even cumulating jobs allows workers and their families to escape poverty, while cumulating several jobs does appear as a more effective way to escape poverty elsewhere in the world. This points once again to the poorest of the poor being more exposed and vulnerable to poverty, and with less resources available to overcome it.
Beyond monetary poverty with international poverty lines: other measures to reveal different and cumulative deficits
Up to here, we have been focusing on monetary poverty, meaning deprivation as conveyed by the level of income (or expenditure). Monetary poverty is a meaningful and compelling indicator, informing on the monetary struggle to access a decent standard of living. However, it can also mask strong differences in people’s situation: in some cases, people in monetary poverty may have access to free quality education and health services, adequate public infrastructure, sanitation, electricity, etc. while others may have access to none of those. Naturally, monetary poverty is strongly correlated with other deprivations, but this correlation is not always so straightforward.
What is more, to this point, we have used international (standard) poverty lines to define which households are considered poor. Nonetheless, national poverty lines reflect more accurately each country’s socioeconomic context, cost of living, and consumption patterns.
Therefore, any attempt at an in-depth poverty analysis should combine different measures to reflect the multidimensional nature of poverty. Here are some examples of valuable complementary poverty measures:
Monetary poverty according to the national poverty line
International poverty lines are useful for tracking global poverty trends, monitoring progress towards global goals, and comparing progress across countries and regions, while national poverty lines are more appropriate for understanding and addressing poverty within the context of a specific country. Recognizing the relevance of their joint analysis, both measures are included in the SDG Global Indicator Framework. Indeed, in 129 of the 146 countries with data (88 per cent) in the SDG Indicators Database, the poverty rate is higher according to the national line than the international line, with an average difference of 15 percentage points. This includes 37 countries for which it is estimated that no household lives under the international poverty line, while the national poverty line yields (much) higher poverty rates.
Relative monetary poverty
The poverty lines mentioned up to now in this blog are all absolute, that is, they establish a fixed monetary amount representing the minimum income level or standard of living below which individuals are considered poor. Absolute poverty measures can be complemented with relative poverty ones, which define poverty in comparative terms, for example, in relation to the average income or standard of living. While absolute poverty reflects unmet basic needs, relative poverty captures more inequality and social exclusion. The relative poverty line used by OECD refers to half the median household income. In 2022, Costa Rica had the highest poverty rate among OECD countries, with 21 per cent of its population living on less than half the median household income. It was followed by the United States (18.1 per cent), Latvia (16.9 per cent) and Chile (16.8 per cent).
Multidimensional poverty
Some poverty measures go beyond monetary aspects to capture other types of deprivations. For example, the World Bank Multidimensional Poverty Index measures the percentage of households deprived of access to education and basic infrastructure services, in addition to monetary poverty. The global multidimensional poverty rate for circa 2018 was 14.5 per cent, nearly double the monetary poverty rate of 8.8 per cent. Strikingly, in Sub-Saharan Africa, the majority of the population (52.2 percent) experienced multidimensional poverty, nearly double the share experiencing monetary poverty in the region (32.7 per cent).
Once again, we observe that plights cumulate: not only does Sub-Saharan Africa have much higher multidimensional and monetary poverty rates than any other region in the world, but the gap between the two measures is also the widest in that region. People in Sub-Saharan Africa are facing multiple deprivations simultaneously, but the lack of access to education and basic infrastructure is especially stark.
Also, 39 per cent of people considered multidimensionally poor are not in monetary poverty, meaning they are deprived in non-monetary dimensions alone.
Subjective poverty
Up to here, we have referred exclusively to objective poverty measures. Yet, poverty can also be defined by subjective criteria. In fact, subjective poverty measures, which rely on people’s own assessment of their situation, give insights into perceptions and experiences of poverty and deprivation, casting light on the complexity of poverty. Subjective poverty measures may refer to people’s own evaluation of their economy or finances, their ability to make ends meet, their level of needs satisfaction, etc.
In 2023, 24.1 per cent of people in the European Union were subjectively poor (they expressed having difficulty or great difficulty in making ends meet). Subjective poverty was more common among the unemployed (44.7 per cent) and less so among retired persons (15.8 per cent) and the employed (14.9 per cent). The share of people considered subjectively poor was significantly larger than those at risk of poverty (16.2 per cent), defined as those with an income below 60 per cent of the national median equivalised disposable income after social transfers.
Personal poverty
Poverty (whether measured in absolute or relative terms) is typically assessed at the household level. That is, the incomes or expenditures of all household members are pooled and compared to the poverty line, considering the number of household members. This procedure assumes there is an equal distribution of household resources across household members, but it may not always be the case. Thus, it is possible to complement the analysis with personal poverty measures, which focus on the individual rather than the household. These can be particularly gender relevant, since in household-level measures gender differences tend to be muffled, whereas personal measures will reveal them. As shown by the novel personal poverty measure developed by Statistics Netherlands, this approach enables the study of the level of economic independence within the household and the impact of eventualities such as divorce or widowhood.
