How much does reducing inequality matter for global poverty?

The goals of ending extreme poverty by 2030 and working towards a more equal distribution of incomes are part of the United Nations’ Sustainable Development Goals. Using data from 166 countries comprising 97.5 percent of the world’s population, we simulate scenarios for global poverty from 2019 to 2...

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Main Authors:	Lakner, Christoph, Gerszon Mahler, Daniel, Negre, Mario, Prydz, Espen Beer
Format:	Journal Article
Published:	Springer Nature 2022
Subjects:	POVERTY INEQUALITY INCLUSIVE GROWTH COVID-19 SDGs SIMULATION MACHINE-LEARNING
Online Access:	http://hdl.handle.net/10986/37146

id	okr-10986-37146
recordtype	oai_dc
spelling	okr-10986-371462022-03-17T05:10:41Z How much does reducing inequality matter for global poverty? Lakner, Christoph Gerszon Mahler, Daniel Negre, Mario Prydz, Espen Beer POVERTY INEQUALITY INCLUSIVE GROWTH COVID-19 SDGs SIMULATION MACHINE-LEARNING The goals of ending extreme poverty by 2030 and working towards a more equal distribution of incomes are part of the United Nations’ Sustainable Development Goals. Using data from 166 countries comprising 97.5 percent of the world’s population, we simulate scenarios for global poverty from 2019 to 2030 under various assumptions about growth and inequality. We use different assumptions about growth incidence curves to model changes in inequality and rely on a machine-learning algorithm called model-based recursive partitioning to model how growth in GDP is passed through to growth as observed in household surveys. When holding within-country inequality unchanged and letting GDP per capita grow according to World Bank forecasts and historically observed growth rates, our simulations suggest that the number of extreme poor (living on less than 1.90 dollars/day) will remain above 600 million in 2030, resulting in a global extreme poverty rate of 7.4 percent. If the Gini index in each country decreases by 1 percent per year, the global poverty rate could reduce to around 6.3 percent in 2030, equivalent to 89 million fewer people living in extreme poverty. Reducing each country’s Gini index by 1 percent per year has a larger impact on global poverty than increasing each country’s annual growth 1 percentage point above forecasts. We also study the impact of COVID-19 on poverty and find that the pandemic may have driven around 60 million people into extreme poverty in 2020. If the pandemic increased the Gini index by 2 percent in all countries, then more than 90 million may have been driven into extreme poverty in 2020. 2022-03-16T20:30:31Z 2022-03-16T20:30:31Z 2022-03-02 Journal Article The Journal of Economic Inequality http://hdl.handle.net/10986/37146 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Springer Nature Publications & Research :: Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	POVERTY INEQUALITY INCLUSIVE GROWTH COVID-19 SDGs SIMULATION MACHINE-LEARNING
spellingShingle	POVERTY INEQUALITY INCLUSIVE GROWTH COVID-19 SDGs SIMULATION MACHINE-LEARNING Lakner, Christoph Gerszon Mahler, Daniel Negre, Mario Prydz, Espen Beer How much does reducing inequality matter for global poverty?
description	The goals of ending extreme poverty by 2030 and working towards a more equal distribution of incomes are part of the United Nations’ Sustainable Development Goals. Using data from 166 countries comprising 97.5 percent of the world’s population, we simulate scenarios for global poverty from 2019 to 2030 under various assumptions about growth and inequality. We use different assumptions about growth incidence curves to model changes in inequality and rely on a machine-learning algorithm called model-based recursive partitioning to model how growth in GDP is passed through to growth as observed in household surveys. When holding within-country inequality unchanged and letting GDP per capita grow according to World Bank forecasts and historically observed growth rates, our simulations suggest that the number of extreme poor (living on less than 1.90 dollars/day) will remain above 600 million in 2030, resulting in a global extreme poverty rate of 7.4 percent. If the Gini index in each country decreases by 1 percent per year, the global poverty rate could reduce to around 6.3 percent in 2030, equivalent to 89 million fewer people living in extreme poverty. Reducing each country’s Gini index by 1 percent per year has a larger impact on global poverty than increasing each country’s annual growth 1 percentage point above forecasts. We also study the impact of COVID-19 on poverty and find that the pandemic may have driven around 60 million people into extreme poverty in 2020. If the pandemic increased the Gini index by 2 percent in all countries, then more than 90 million may have been driven into extreme poverty in 2020.
format	Journal Article
author	Lakner, Christoph Gerszon Mahler, Daniel Negre, Mario Prydz, Espen Beer
author_facet	Lakner, Christoph Gerszon Mahler, Daniel Negre, Mario Prydz, Espen Beer
author_sort	Lakner, Christoph
title	How much does reducing inequality matter for global poverty?
title_short	How much does reducing inequality matter for global poverty?
title_full	How much does reducing inequality matter for global poverty?
title_fullStr	How much does reducing inequality matter for global poverty?
title_full_unstemmed	How much does reducing inequality matter for global poverty?
title_sort	how much does reducing inequality matter for global poverty?
publisher	Springer Nature
publishDate	2022
url	http://hdl.handle.net/10986/37146
_version_	1764486599646642176

How much does reducing inequality matter for global poverty?

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