Piecing Together The Poverty Puzzle - World Bank
PIECING TOGETHERPOVERTYPUZZLETHE
PIECING TOGETHERPOVERTYPUZZLETHE
2018 International Bank for Reconstruction and Development / The World Bank1818 H Street NW, Washington DC 20433Telephone: 202-473-1000; Internet: www.worldbank.orgSome rights reserved1 2 3 4 21 20 19 18This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, itsBoard of Executive Directors, or the governments they represent. The World Bank does not guarantee theaccuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges andimmunities of The World Bank, all of which are specifically reserved.Rights and PermissionsThis work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 . Under the Creative Commons Attribution license, youare free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under thefollowing conditions:Attribution—Please cite the work as follows: World Bank. 2018. Poverty and Shared Prosperity 2018:Piecing Together the Poverty Puzzle. Washington, DC: World Bank. License: Creative Commons Attribution CC BY 3.0 IGOTranslations—If you create a translation of this work, please add the following disclaimer along withthe attribution: This translation was not created by The World Bank and should not be considered an officialWorld Bank translation. The World Bank shall not be liable for any content or error in this translation.Adaptations—If you create an adaptation of this work, please add the following disclaimer along withthe attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressedin the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsedby The World Bank.Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third-partyowned individual component or part contained in the work will not infringe on the rights of those thirdparties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-usea component of the work, it is your responsibility to determine whether permission is needed for thatre-use and to obtain permission from the copyright owner. Examples of components can include, but arenot limited to, tables, figures, or images.All queries on rights and licenses should be addressed to World Bank Publications, The World BankGroup, 1818 H Street NW, Washington, DC 20433, USA; e-mail: pubrights@worldbank.org.ISBN (paper): 978-1-4648-1330-6ISBN (electronic): 978-1-4648-1360-3DOI: 10.1596/978-1-4648-1330-6Cover design: Patricia Hord.Graphik DesignLibrary of Congress Cataloging-in-Publication Data has been requested.
ContentsForewordAcknowledgmentsAbout the TeamAbbreviationsOverviewxixiiixvxix1Staying focused on the poorestMonitoring progress in a growing worldPiecing together the poverty puzzle4712Introduction151 Ending Extreme Poverty: Progress, but Unevenand SlowingMonitoring extreme poverty: A quarter century of progressNowcasts and forecasts to 2030Uneven progress: A regional profile of poverty reductionDrilling down: The countries with the most poorSocioeconomic and demographic profile of global povertyConclusionsAnnex 1A Historical global and regional poverty estimatesAnnex 1B Validation check of the 2030 poverty projectionsNotes2 Shared Prosperity: Mixed ProgressBeyond extreme poverty: A focus on the bottom 40Continued progress in most economies though some are falling shortThe poorest countries have limited information about shared prosperityGrowth at the bottom and the top is not always evenWho are the bottom 40?Monitoring the twin goals1919222429373941464749495054555859v
Annex 2A Shared prosperity definitionsAnnex 2B Shared prosperity estimates by economyNotes6263663 Higher Standards for a Growing World67IntroductionHigher poverty lines for everyone: US 3.20 and US 5.50 a dayHigher lines tailored to country circumstances: Societal povertyWhy not simply use national poverty lines?ConclusionAnnex 3A Historical global and regional poverty estimatesNotes4 Beyond Monetary Poverty87Why look beyond monetary poverty?Considerations for constructing multidimensional poverty measuresA first global pictureA deeper lookConclusionAnnex 4A Comparison of indicators used in multidimensionalpoverty measuresAnnex 4B Multidimensional poverty measures: A formalizationAnnex 4C Statistical tablesNotesSpotlight 4.1 National multidimensional poverty indexes1101111131201225 Inside the Household: Poor Children, Women, and Men125IntroductionBeyond headship: Gender and age profiles of the global poorDifferences in resources and poverty within householdsAn individual perspective on multidimensional povertyConclusionAnnex 5A Technical note: Estimating intrahousehold resource sharesNotes125128132140144147148Appendix AData DetailsMain databases for the reportClassification of economiesChapter 1 data and methodologyChapter 2 data and methodologyChapter 3 data and methodologyChapter 4 data and methodologyChapter 5 data and methodologyNoteReferencesvi67687279818385POVERTY AND SHARED PROSPERITY 2018889096103108151151152154159161162165166167
Boxes1.1 Alignment of the SDGs and the TwinGoals of the World Bank Group1.2 Chapter 1: Data Overview1.3 India: Issues with the 2015 PovertyEstimate and 2030 Forecasts2.1 The Global Database of SharedProsperity2.2 Country Stories2.3 The Shared Prosperity Premium andOther Concepts of Inequality4.1 Early Applications of MultidimensionalPoverty Measurement202132505356904.2 Incorporating Aspects of Qualityinto Multidimensional PovertyMeasures954.3 Chapter 4: Data Overview975.1 Differences in Needs andEquivalence Scales1275.2 Chapter 5: Data Overview1285.3 Dietary Diversity as an Indicator ofIndividual-Level Food Security1355.4 Child Poverty1415.5 Gender and Socioemotional Dimensionsof Poverty: Participatory Studies145FiguresO.1 Global Extreme Poverty Rate andHeadcount, 1990–2015O.2 Share of Individuals inMultidimensional Poverty, circa 2013O.3 Percent of Females and Males Livingin Households in Extreme Poverty,by Age Group, circa 2013O.4 National and Societal Poverty Linesin a Growing WorldO.5 Societal Poverty, Global Estimates,1990–2015O.6 Contribution to MultidimensionalPoverty, by Dimension, SelectedCountriesO.7 Gender Gaps, IndividualMultidimensional Poverty, SelectedCountries1.1 Global Extreme Poverty Rate andHeadcount, 1990–20151.2 Projections to 2030 of Global ExtremePoverty1.3 Number of Extreme Poor by Region,1990–20301.4 Regional GDP per Capita Growthand Average Growth for the ExtremePoor, 1990–20171.5 Extreme Poverty Rate by Region andCountry, 20151.6 Extreme Poverty, Regional and WorldTrends, 1990–20151.7 Rate and Number of the Extreme Poor,by Income Group, 20151.8 Global Distribution of the ExtremePoor by Region and Country, 20151.9 Projections to 2030 for the FiveCountries with the Most Extreme Poorin 20152569911122123252528292930311.10 Household Size and DependencyRatio in Sub-Saharan Africa1.11 Under-Five Mortality, Fertility, andPopulation Growth in Sub-SaharanAfrica1.12 Concentration of Extreme Povertyin Fragile and Conflict-AffectedSituations1.13 Fragile Situations Perform Poorly inMultiple Constituent Componentsof Fragility1A.1 Global Total Consumption Gap ofthe Extreme Poor, 1990–20151B.1 Projections to 2015 of Global ExtremePoverty2.1 Shared Prosperity, 91 Economies,circa 2010–152.2 Shared Prosperity Estimates,91 Economies, by Region, Group,and Income2.3 Correlation between SharedProsperity and the Shared ProsperityPremium, 91 Economies2.4 Growth across Deciles of the IncomeDistribution, Selected Countries2.5 Extreme Poverty and the Bottom 40,Selected Countries, circa 20152.6 Mean Income, by DistributionDecile, Selected Countries, 20152.7 Share of Consumption or Income,by Decile, Selected Countries,circa 20152.8 Shared Prosperity and Changesin Extreme Poverty, 91 Economies,circa 2010–152.9 Shared Prosperity among the PoorestEconomies, circa 2010–15343536374146515557585959606161CONTENTSvii
2B.1 The Shared Prosperity Premium,91 Economies, by Region or IncomeClassification663.1 Consumption and IncomeDistributions, 1990 and 2015713.2 National Poverty Lines andEconomic Development733.3 Societal Poverty Line753.4 Societal Poverty, Global Estimates,1990–2015773.5 Change in the Societal Poverty Linefrom Growth783.6 Societal Poverty and Shared Prosperityin Costa Rica and Ecuador793.7 Comparing National and SocietalPoverty Lines and Rates, Vietnam,1993–2015814.1 Share of Individuals inMultidimensional Poverty,119 Economies, circa 2013984.2 Share of Individuals Deprived in atLeast a Given Number of Indicators,119 Economies, circa 20131004.3 Contribution of Indicators to theAdjusted Headcount Measure (M),119 Economies, circa 20131024.4 Difference in the Share of the Poorin Rural Areas, MultidimensionalHeadcount versus MonetaryHeadcount, 119 Economies,circa 20131034.5 Contribution to Monetary andMultidimensional Poverty, byHousehold Type, 119 Economies,circa 20131034.6 Share of Individuals Deprived in atLeast a Given Number of Indicators,Selected Countries1054.7 The Headcount Ratio, by AlternativePoverty Measures, Selected Countries 1064.8 Contribution to MultidimensionalPoverty (M), by Dimension,Selected Countries1064.9 The Poor, by SociodemographicCharacteristics, Selected Countries1074C.1 Share of Individuals in MultidimensionalPoverty, by Region, circa 20131195.1 Percent of Females and Males Livingin Households in Extreme Poverty,by Age Group, circa 20131305.2 Distribution of People Living inHouseholds in Extreme Poverty, by Sexand Employment Status, circa 20131315.3 Distribution of Households inExtreme Poverty, by DemographicTypology, circa 20131315.4 Distribution of Households inExtreme Poverty, by EconomicTypology, circa 20131325.5 The Gender Gap in Food Consumptionover the Life Cycle, China1345.6 Caloric Shortfalls of Male Headsand Other Household Members,Bangladesh1365.7 Estimated Consumption Allocation,Men, Women, and Children,Bangladesh and Malawi1395.8 Individual Poverty Rates, NuclearHouseholds, Bangladesh and Malawi 1405.9 Gender Gaps, Education, andNutrition Deprivation, SelectedCountries1425.10 Gender Gaps, IndividualMultidimensional Poverty,Selected Countries143A.1 Use of Income/Consumption toMeasure Poverty157A.2 Shared Prosperity Indicators AreLess Likely in Economies at LowerGDP per Capita160MapsO.1 Shared Prosperity across the World,91 Economies, circa 2010–151.1 Extreme Poverty Rate by Country,20152.1 Shared Prosperity across the World,91 Economies, circa 2010–15524.1 Provincial Poverty Rates, Ecuador1081027TablesO.1 Poverty at Higher Poverty Lines,US 3.20 and US 5.50 (2011 PPP)1.1 Age and Gender Profile of theExtreme Poor, 2015viiiPOVERTY AND SHARED PROSPERITY 20188381.2 Education and Access to Servicesamong the Extreme Poor and NonpoorHouseholds39
1A.1 Global and Regional Extreme Poverty,1990–2015421A.2 Extreme Poverty, by Economy,20152.1 Shared Prosperity and SharedProsperity Premium, 91 Economies,Summary Table, circa 2010–154350B2.3.1 Number of Economies with TopIncomes Estimated in the WorldInequality Database and in the Povertyand Shared Prosperity 2018 Report562B.1 Shared Prosperity Estimates, 91Economies, circa 2010–15632B.2 Changes in Shared Prosperity,67 Economies, circa 2008–13 tocirca 2010–15652B.3 Changes in the Shared ProsperityPremium, 67 Economies,circa 2008–13 to circa 2010–15653.1 National Poverty Lines, circa 2011693.2 Poverty at Higher Poverty Lines,US 3.20 and US 5.50 (2011 PPP)703.3 Average Societal Poverty Lines,by Region and Income Classification,1990–2015763.4 Societal Poverty Rates, 1990–2015773A.1 Historical Trends, Global PovertyEstimates, 1990–2015833A.2 Historical Trends, Regional PovertyRates, 1990–2015843A.3 Historical Trends, Regional Numberof Extreme Poor, 1990–2015844.1 Dimensions of Well-Being andIndicators of Deprivation934.2 Indicator Weights: Analysis of ThreeDimensions964.3 Indicator Weights: Analysis of FiveDimensions964.4 People Living in Monetary orMultidimensional Poverty,119 Economies, circa 2013974.5 Individuals in Households Deprivedin Each Indicator, 119 Economies,circa 2013994.6 The Multidimensionally Poor andthe Breadth of Deprivation, by Numberof Deprivations, 119 Economies,circa 20131014.7 Regional Contributions toMultidimensional Poverty,119 Economies, circa 20131014.8 Percent of Individuals Deprived,by Indicator, Selected Countries1044A.1 Dimensions and Indicators1104C.1 People Living in Monetary orMultidimensional Poverty, byRural-Urban Areas, 119 Economies,circa 20131134C.2 People Living in Monetary orMultdimensional Poverty, byHousehold Type, 119 Economies,circa 20131134C.3 Individuals in Households Deprivedin Each Indicator, 119 Economies,circa 20131144C.4 Multidimensional Poverty acrossAlternative Measures, 119 Economies,circa 20131175.1 Households in Extreme Poverty,Rates and Distribution by Headship,circa 20131295.2 Recent Data Sets on IndividualizedConsumption1335.3 Individuals Misclassified by theHousehold Measure of CaloricAvailability1365.4 Indicators and Dimensions, theIndividual and HouseholdMultidimensional Poverty Measure142A.1 Overview of Principal Data Sourcesby Chapter152A.2 Shared Prosperity Availability acrossRounds161A.3 Surveys Used in Chapter 1 andChapter 4 in Cases Where DifferentSurvey Rounds Are Used163A.4 Household Surveys, Six-CountrySample164A.5 Household Surveys for Case Studiesand Sharing Rule Estimates166CONTENTSix
ForewordFive years ago, the World Bank Group set two overarching goals: to end extreme poverty by2030, and to promote shared prosperity by boosting the incomes of the bottom 40 percent ofthe population in each country.As this year’s Poverty and Shared Prosperity report documents, the world continues tomake progress toward eliminating poverty. In 2015, approximately one-tenth of the world’spopulation lived in extreme poverty—the lowest poverty rate in recorded history. This is animpressive achievement, considering that in 1990, more than a third of people on earth lived inextreme poverty. Since we last reported on global poverty two years ago, the number of poorhas diminished by 68 million.But we cannot take success for granted. Poverty is on the rise in several countries inSub-Saharan Africa, as well as in fragile and conflict-affected situations. In many countries,the bottom 40 percent of the population is getting left behind; in some countries, the livingstandard of the poorest 40 percent is actually declining. To reach our goal of bringing extremepoverty below 3 percent by 2030, the world’s poorest countries must grow at a rate that farsurpasses their historical experience. There is no room for complacency. We must intensifythe effort to promote economic growth in the lagging countries and ensure that the poorest 40percent of the population benefits more from economic progress.Reducing extreme poverty to less than 3 percent by 2030 remains a considerable challenge,and it will continue to be our focus. At the same time, most of the world’s poor now live inmiddle-income countries, and our research indicates that those countries tend to have a moredemanding view of poverty. Drawing on national poverty lines, we now also report poverty ratesat two higher thresholds— 3.20 per day and 5.50 per day—which are typical of standards inlower- and upper-middle-income countries.These thresholds are a recognition that the concept of poverty itself is dependent on one’ssocial circumstances. What is a luxury in one society could be a necessity in another. Even ifminimum physical needs are met, people cannot be said to lead flourishing lives if they are notable to conduct themselves with dignity in the society in which they live. The societal povertyrate presented in this report gauges people’s well-being by the standard of their surroundings.Poverty encompasses a shortfall in income and consumption, but also low educationalachievement, poor health and nutritional outcomes, lack of access to basic services, anda hazardous living environment. If we hope to tackle poverty “in all its forms everywhere”as the Sustainable Development Goals call for, we must understand and measure povertyin all of its manifestations. This report presents results of the World Bank’s first exercisein multidimensional global poverty measurement to account for multiple and overlappingcomponents of poverty.xi
Traditionally, poverty is measured at the household level, but because there is inequalitywithin households, there are undoubtedly people living in poverty within nonpoor households.Current data and methods do not permit us to account for inequality within households in mostcountries, so a chapter of the report examines select country studies where this accountingis possible, and it describes how it affects the profile of poverty, including by gender and age.The twin goals of ending extreme poverty and boosting shared prosperity will continueto guide our work. The new suite of poverty lines and measures broadens our conception ofpoverty. As this report shows, taking such an expansive view only reinforces how far we stillneed to go to rid the world of poverty in all of its dimensions.Jim Yong KimPresidentWorld Bank GroupxiiPOVERTY AND SHARED PROSPERITY 2018
AcknowledgmentsThis report was prepared by a team co-led by Dean Jolliffe and María Ana Lugo. The coreteam included Bénédicte Leroy de la Brière, Jed Friedman, Isis Gaddis, Roy Katayama, DanielGerszon Mahler, Mario Negre, David Newhouse, Minh Cong Nguyen, Espen Beer Prydz, MaikaSchmidt, Dhiraj Sharma, and Judy Yang. The extended team included Sabina Alkire, Luis AlbertoAndrés, Paola Buitrago Hernandez, Samuel Freije-Rodríguez, Xavier Godinot, Stephan Klasen,Rahul Lahoti, Christoph Lakner, Sylvie Lambert, Valérie Lechene, Libbet Loughnan, CarolinaMejía-Mantilla, Ana María Muñoz Boudet, Rakesh Gupta N. Ramasubbaiah, Raul SantaeulaliaLlopis, Kenneth Simler, Sharad Tandon, Robert Walker, Alexander Wolf, and Ruoxuan Wu, allof whom provided key inputs. Karem Nathalia Edwards de Izquierdo, Pamela Gaye Gunio, andEstella Malayika provided overall support to the report team.The work has been carried out under the general direction of Francisco H. G. Ferreira, HaishanFu, Caren Grown, and Carolina Sánchez-Páramo. The team is also grateful for guidance andadvice from Kaushik Basu, Shantayanan Devarajan, Akihiko Nishio, and Carlos Silva-Jáuregui.Elizabeth Howton, Mark Felsenthal, and Venkat Gopalakrishnan led the communication andmessaging of the report, with inputs from Indira Chand, Paul Gallagher, Mary Donaldson Lewis,Mikael Reventar, Victoria Smith, and Divyanshi Wadhwa. Additional support was provided by theMedia and Web & Social Media teams of External and Corporate Relations. Robert Zimmerman,Honora Mara, and Stuart Grudgings provided editing services. Patricia Katayama, from the WorldBank’s Development Economics unit, was the acquisitions editor. The production of the reportand overview were managed by World Bank Publications, Global Corporate Solutions unit, withSusan Graham as the production editor and Deborah Appel-Barker as the print coordinator, andwith help from Bruno Bonansea (cartography), Aziz Gokdemir, and Susan Mandel. Patricia Horddesigned the overview booklet and the report covers.This report would not have been possible without inputs from many different people,including data inputs from the PovcalNet and Data 4 Goals tea
4.1 Share of Individuals in Multidimensional Poverty, 119 Economies, circa 2013 98 4.2 Share of Individuals Deprived in at Least a Given Number of Indicators, 119 Economies, circa 2013 100 4.3 Contribution of Indicators to the Adjusted Headcount Measure (M), 119 Economies, circa 2013 102 4
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