Events

Title: How Poverty Fell

Abstract: The share of the global population living in extreme poverty fell dramatically from an estimated 44% in 1981 to 9% in 2019. We describe how this happened: the extent to which changes within as opposed to between cohorts contributed to poverty declines, and the key changes in the lives of households as they transitioned out of (and into) poverty. We do so using cross-sectional and panel sources that are representative or near-representative of countries that collectively accounted for 70\% of global poverty decline since 1990. The repeated cross-sections show that the decline of poverty over time can be viewed as shared in parallel by all birth cohorts, such that poverty decline was primarily a within-cohort phenomenon. The panels show substantial within-cohort churn: gross transitions out of poverty were much larger than net changes, as many households also lapsed back into poverty. The overall picture is of a "slippery slope'' rather than a long-term trap. The role of sectoral transitions varied across countries, though progress within a given sector (most often agriculture) and a given occupation generally played a larger role than transitions between sectors or occupations.