Syndicate content

Poverty

Make it convenient, make it credible

Haishan Fu's picture

We’re living in a time of disruptive technologies evolving at an exponential pace. Today, you can enjoy an Impossible Burger (meat industry disrupted) delivered by Caviar (food delivery disrupted) to your AirBnB (hotel industry disrupted) while you’re on FaceTime (telecommunication industry disrupted) urging your teenager to get back to lessons on Khan Academy (education industry disrupted). And all the while, you’re leaving a trail of digital data points.

So rather than trying to predict what the future will bring, I want to focus on the principles we should use to shape it. What do we want the future to look like? In the World Bank’s lobby, there’s a giant inscription that reads “Our Dream is a World Free of Poverty”. I think the key to bringing about that world is getting quality data into the hands of people who can use it to make the world better. To me, this means two things: making data convenient and making data credible.

Monitoring the SDGs with purchasing power parities

Edie Purdie's picture

The ICP blog series explores ideas and issues under the International Comparison Program umbrella – including innovations in price and data collection, discussions on purpose and methodology, as well the use of purchasing power parities in the growing world of development data. Authors from across the globe, whether ICP practitioners or researchers making use of ICP data, are encouraged to submit relevant blogs for consideration to [email protected].

It has been over three years since countries adopted the UN’s 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals. From the outset, a number of targets were identified to help pinpoint the desired outcomes within these broad areas – 169 in total. Monitoring progress towards each of these targets relies on data originating in countries, and which are often collected in partnership with regional and international organizations. The World Bank’s Atlas of Sustainable Development Goals used such data to visualize trends and comparisons across the globe, drawing on data from World Development Indicators and many other sources.

Purchasing Power Parity (PPP) data, from the International Comparison Program, play an important role in this monitoring: by eliminating the effect of price level differences between countries they allow us to measure living standards and other economic trends in real, comparable terms.  PPPs are utilized in a number of the official SDG indicators, but also in other associated indicators, which help us to explore the underlying issues and impacts of the goals and targets more deeply.  The four charts presented here exemplify the crucial insights PPPs help provide in SDG monitoring and analysis.

Goal 1 seeks to eradicate poverty in all its forms by 2030. Extreme poverty is measured using the international poverty line of $1.90 a day using 2011 PPPs. The use of PPPs ensures that the poverty line represents the same standard of living in every county. Higher poverty lines used by the World Bank better measure poverty in lower-middle and upper-middle income countries.  Using these poverty lines, we can visualize the shifts in population living at various standards of living.

Half of the world’s poor live in just 5 countries

Roy Katayama's picture
Also available in: Español | Français | العربية

Of the world’s 736 million extreme poor in 2015, 368 million—half of the total—lived in just 5 countries. The 5 countries with the highest number of extreme poor are (in descending order): India, Nigeria, Democratic Republic of Congo, Ethiopia, and Bangladesh. They also happen to be the most populous countries of South Asia and Sub-Saharan Africa, the two regions that together account for 85 percent (629 million) of the world’s poor. Therefore, to make significant continued progress towards the global target of reducing extreme poverty (those living on less than $1.90 a day) to less than 3 percent by 2030, large reductions in poverty in these five countries will be crucial.

Shared Prosperity: A challenging but important goal to monitor

Judy Yang's picture

Shared prosperity is one of the World Bank Group’s Twin Goals, introduced in 2013. Progress toward this goal is monitored through an indicator that measures the annualized growth rate in average household per capita income or consumption among the poorest 40 percent of the population in each country (the bottom 40), where the bottom 40 are determined by their rank in household per capita income or consumption. Chapter 2 of the 2018 Poverty & Shared Prosperity Report provides an update on the recent mixed progress on shared prosperity around the world in about 2010-15.

The shared prosperity indicator was proposed as a means to shine a constant light on the poorest segments of the population in every country, irrespective of their level of development. Shared prosperity has no target or finish line, because the aim is to continuously improve well-being. In good times and in bad, in low and high-income economies alike, the bottom 40 percent of the population in each nation would be monitored. Tracking the bottom 40’s absolute growth as well as their growth relative to the mean is a way to remind us to always consider distributional impacts and strive for equitable outcomes.

An important but challenging goal to monitor

Despite its importance and universal relevance, shared prosperity is more challenging to monitor than global poverty. While one household survey is sufficient to calculate poverty, shared prosperity measurement requires two recent comparable surveys.

The implication of this stronger data requirement is that 91 out of the 164 economies with an international poverty rate measured in PovcalNet are included in the 6th edition of the Global Database of Shared Prosperity (GDSP).

Poverty lies beyond the unemployed

Isis Gaddis's picture
Also available in: العربية

Globally, poverty by employment status is highest among unpaid workers (22 percent), followed by self-employment, and those out of the labor force (both 12 percent). Not surprisingly, income-earning capacity (proxied by employment status) is strongly associated with poverty and gender. When disaggregated by sex, there are roughly equal numbers of men and women among the poor who are unemployed. There are more men than women among the self-employed poor. However, women make up most of the poor who are unpaid workers or out of the labor force. To learn more, read the recently released Poverty and Shared Prosperity report 2018, “Piecing Together the Poverty Puzzle.”

More than money: Counting poverty in multiple forms

Dhiraj Sharma's picture
Also available in: Español | العربية | Français

Consider two households that have the same level of consumption (or income) per person but they differ in the following ways. All the children in the first household go to school, while the children in the second household work to support the family. The first household obtains drinking water from a tap connected to the public distribution network, whereas the second household fetches water from a nearby stream. At night, the first home is illuminated with electricity, whereas the second home is dark. A lay person would easily recognize which of these two families is better off. Yet, traditional measures of household well-being would put the two households on par because conventionally, household well-being has been measured using consumption (or income).

Nearly 1 in 2 in the world lives under $5.50 a day

Dean Mitchell Jolliffe's picture
Also available in: Français | Español | العربية

Today, less than 10 percent of the world population lives in extreme poverty. Based on information about basic needs collected from 15 low-income countries, the World Bank defines the extreme poor as those living on less than $1.90 a day. However, because more people in poverty live in middle-income, rather than low-income, countries today, higher poverty lines have been introduced. These lines are $3.20 and $5.50 a day, which are more typical of poverty thresholds for middle-income countries.

Introducing the online guide to the World Development Indicators: A new way to discover data on development

World Bank Data Team's picture
Also available in: العربية | Español | 中文 | Français

The World Development Indicators (WDI) is the World Bank’s premier compilation of international statistics on global development. Drawing from officially recognized sources and including national, regional, and global estimates, the WDI provides access to almost 1,600 indicators for 217 economies, with some time series extending back more than 50 years. The database helps users—analysts, policymakers, academics, and all those curious about the state of the world—to find information related to all aspects of development, both current and historical.

An annual World Development Indicators report was available in print or PDF format until last year. This year, we introduce the World Development Indicators website: a new discovery tool and storytelling platform for our data which takes users behind the scenes with information about data coverage, curation, and methodologies. The goal is to provide a useful, easily accessible guide to the database and make it easy for users to discover what type of indicators are available, how they’re collected, and how they can be visualized to analyze development trends.

So, what can you do on the new World Development Indicators website?

1. Explore available indicators by theme

The indicators in the WDI are organized according to six thematic areas: Poverty and Inequality, People, Environment, Economy, States and Markets, and Global Links. Each thematic page provides an overview of the type of data available, a list of featured indicators, and information about widely used methodologies and current data challenges.

Behind Closed Doors: how traditional measures of poverty mask inequality inside the household and a new look at possible solutions

Caren Grown's picture

During the days coming up to, and after October 17, when many stories, numbers, and calls for action will mark the International Day for the Eradication of Poverty, we want to invite you to think for a second on what you imagine a poor household to be like. Is this a husband, wife, and children, or maybe an elderly couple? Are the children girls or boys? And more importantly, do all experience the same deprivations and challenges from the situation they live in?  In a recent blog post and paper, we showed that looking at who lives in poor homes—from gender differences to household composition more broadly—matters  to better understand and tackle poverty.

Globally, female and male poverty rates—defined as the share of women and men who live in poor households—are very similar (12.8 and 12.3 percent, respectively, based on 2013 data). Even in the two regions with the largest number of poor people (and highest poverty rates)—South Asia and Sub-Saharan Africa—gender differences in poverty rates are quite small. This is true for the regions, but also for individual countries, irrespective of their share of poor people. Why is that the case? As Chapter 5 of the 2018 Poverty and Shared Prosperity Report explains, our standard monetary poverty indicator is measured by household, not by individual. So, a person is classified as either poor or nonpoor according to the poverty status of the household in which she or he lives. This approach critically assumes everyone in the household shares equally in household consumption—be they a father, a young child, or a daughter-in-law.  By design, it thus masks differences in individual poverty within a household.

Notwithstanding this shortcoming, when we look a bit deeper the information we have today still shows visible gender differences in poverty rates. Take age, for example. We know that there are more poor children than poor adults, and while we do not find that poverty rates differ much between girls and boys at the early stages of life, stark differences appear between men and women during the peak productive and reproductive years.

Incomes of the poorest are growing in 3 of every 4 economies

Maria Ana Lugo's picture

In much of the world today, the incomes of the poor are growing. The World Bank calls this concept shared prosperity, defined as the average annual growth in income or consumption of the poorest 40 percent (the bottom 40) within each country. So, if shared prosperity in a country is positive, the poor are getting richer.

In addition, the shared prosperity premium is defined as the difference between the annual income or consumption growth rate of the bottom 40 and the annual growth rate of the mean in the economy. A positive premium indicates that the bottom 40 are getting a larger share of overall income in the economy.

Pages