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Poverty is Destiny?

Raj Nallari's picture

The World Bank estimates that there are more than 1.4 billion people in the world who live below the poverty line of $1.25 per day. It will be interesting to see what happens to children born in poverty: to follow them from womb to tomb, the entire life cycle. We now have several countries with detailed information in the form of living standard measurement and other surveys. There is a lot of country-by-country variation but the trends are unmistakable.

We know from Deaton and Subramanian (1996), the poorest people—the ones in the bottom decline in terms of per capita expenditure—consume on average slightly less than 1400 calories a day, which is almost half of that recommended by poverty specialists. Women, particularly pregnant women still suffer from under-nourishment, iodine and other deficiencies, and lack of pre-natal care (despite the advances made in maternal mortality and pre-natal care in recent years).

Children of the poorest begin with a disadvantage at birth. Medical research has shown that nutrition, cognitive stimulation, and nurturing care before birth through age six strongly influence the child achieving their full potential (Young 2002). For example, rapid brain development occurs during the first few years of life and early childhood experiences have life-long effects. The number of brain cells and inter-connectedness among them is determined quite early. Since growth failure occurs almost exclusively during the intrauterine period and in the first two years of life, prevention of stunting or anemia is needed. Children from rich families are more likely to participate in early child hood programs as documented in a number of developing countries. This means that to avoid poverty and improve standard of living of all people, policies and programs have to be developed to deal with equitable access to and quality of pre-natal care and early childhood development.

The harmful effects of deficient early childhood development outcomes can be long lasting impacting academic achievement, educational attainment, social integration and welfare participation (Vegas and Santibanez 2010).

We also know that children of the poorest go to cheap, public schools. The extremely poor spend very little on education. The expenditure on education generally hovers around 2 percent of household budgets: The reason spending is low is that children in poor households typically attend public schools or other schools that do not charge a fee (Banerjee et al 2008). The mothers of poor children have little or no education. Three- and four year old children of mothers with no education are ten times less likely to attend pre-school programs in Burundi, Niger and several African countries, four times less likely in India, Dominican Republic, and Zambia (Nonoyama et al 2009)

Test scores of a 3-year old child in the poorest decile in Ecuador in 2003-04 was more or less the same as a 3 year old in the fourth decile in the same country. The standardized test scores are around 90 for each child. But within the next two years, the test scores tend to deviate with the scores of the relatively richer child increasing while that of the poorest child falling sharply at the fourth and fifth year. At the end, a five year from the poorest decile has a 40 percent lower test score compared with the relatively richer five year old. We know that the higher the test score at an early age, the higher is the earning advantage for an individual. Richer kids are likely to go to better schools and that exacerbates the gap in test scores even further.

Standardized tests show a huge disparity between children from development countries and those from developing countries. One standard deviation difference in test score performance was related to one percentage point difference in GDP per capita growth per year.

When the poor come under economic stress, their form of “insurance” is often eating less or taking their children out of school. For example, Jacoby and Skoufias (1997) find that poor children leave school in bad years. Rose (1999) finds that the gap in mortality of girls relative to boys is much larger in drought years (but only for the landless households, who are not able to sell land or borrow to weather the crisis). They also are less likely to get medical treatment for themselves or their children.

From the point of view of the poor, this is especially troubling, because they tend to own a lot of the land that was either recently cleared or recently encroached upon, which is typically the land where tilling is incomplete. Field (2006) suggests that, in Peru, the poor, as a result, spend a lot of time protecting their claims to the land (since they have no title, they have no legal recourse). The poor also suffer because where titles are missing or imperfectly enforced, political influence matters.

Shocks affect the poor disproportionately. Unemployment rates remain high long after a shock, particularly financial crisis, despite and lag economic recovery. For example, in the EU-15 during the early 1990s, the incidence of long-term unemployment among prime age workers rose over 8 percentage points and remained stubbornly high for many years. When the poor are ‘hit’ they stay ‘hit’ despite the fiscal stimulus packages in 40+ countries and government proclamations to the contrary.
 

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Submitted by 0ut0f0rder on
Despite having access to the technology to help alleviate global problems like starvation and famine, world governments haven’t found a cost efficient way to work together to solve them. Although wealthier nations do send aid throughout the world it’s still difficult to ensure that the people who are suffering actually receive the help they need. Corruption is prevalent throughout the world and to some degree even in developed western nations. As the world continues to become more complex, Rebecca Costa discusses how to resolve these problems in her book "The Watchman's Rattle.

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