Causes of Absolute Poverty

In 2024, according to World Bank data, about 700 million people (or 8.5% of the world population) were estimated to live below the absolute poverty line of $2.15 per day (PPP adjusted). What are some of the key causes of persistent absolute poverty?

Persistent absolute poverty, affecting approximately 700 million people globally in 2024, stems from several interconnected causes, which are particularly acute in low-income countries and regions experiencing conflict or environmental stress. Here are some of the key factors:

1. Low Economic Growth and Limited Job Opportunities

• Economic stagnation in many low-income countries restricts job creation, especially in sectors that might provide stable, higher-paying employment. For example, in Sub-Saharan Africa, slow industrialisation and reliance on agriculture limit economic diversification and reduce labor productivity, keeping incomes low and trapping people in poverty​

2. Education Deficits and Skill Gaps

• Lack of access to quality education leaves many without the skills needed to access better-paying jobs, which perpetuates the cycle of poverty. Education deficits are prevalent in rural and low-income areas where infrastructure and educational resources are scarce, leading to fewer opportunities for social and economic mobility​

3. Conflict and Political Instability

• Areas affected by ongoing conflicts, such as parts of Sub-Saharan Africa and the Middle East, have disproportionately high levels of poverty. Conflicts disrupt economic activities, displace communities, destroy infrastructure, and make it difficult for governments to deliver essential services. Around three-quarters of the world’s extreme poor live in fragile or conflict-affected settings, where instability compounds poverty​

4. Climate Change and Environmental Degradation

• Climate change disproportionately affects poor communities, as extreme weather events such as droughts, floods, and heat waves reduce agricultural yields, destroy property, and displace populations. Rural communities dependent on agriculture are especially vulnerable, as climate volatility undermines food security and income stability. The World Bank estimates that without climate adaptation, millions more will fall into extreme poverty in coming decades due to climate-related setbacks​

5. Healthcare Access and Health Shocks

• Poor health and lack of access to affordable healthcare contribute to poverty persistence. Health shocks, such as serious illness or injury, can quickly deplete household resources, pushing individuals further into poverty. Additionally, malnutrition and disease impact productivity, particularly in children, leading to long-term effects on their ability to earn a stable income as adults​

6. Population Growth and Dependency Ratios

• Rapid population growth, especially in countries with high fertility rates, creates a high dependency ratio, with a larger portion of the population being young and not yet in the workforce. This strains resources and limits investments in education, healthcare, and infrastructure that are crucial for reducing poverty​

7. Inequality and Exclusion from Economic Systems

• Economic inequalities, including gender and ethnic disparities, restrict access to economic resources like land, capital, and markets. Women and marginalized groups often face barriers to economic participation, which limits income generation and stifles social mobility. Inequality in asset ownership, wages, and job opportunities reinforces poverty traps​

8. Inadequate Infrastructure and Basic Services

• Poor infrastructure, such as lack of transportation, energy, and water, restricts access to markets and limits economic productivity. Limited infrastructure also hampers delivery of basic services like education, healthcare, and clean water, which are critical for improving quality of life and lifting people out of poverty.

Addressing persistent absolute poverty requires multifaceted solutions that include promoting economic growth, improving education and healthcare access, building climate resilience, and ensuring political stability. Investment in these areas by both governments and international institutions is essential to creating sustainable pathways out of poverty.