The regional distribution of the global population living in poverty changes at these higher poverty lines and has changed considerably over time.Figure 2 shows these changes at the three lines between 1990 and 2019.
In 1990, the distribution of the global poor at the three lines was very similar: East Asia and the Pacific accounted for roughly half of the global population living in poverty at any of the three poverty lines (US$2.15, US$3.65, US$6.85). South Asia followed with about 30 percent of the global poor, and Sub-Saharan Africa accounted for another 10 to 15 percent.
Moving forward to 2019, the poverty estimates confirm both a change in the regional distribution of the global poor and a different regional profile at the three poverty lines. The extreme poor are concentrated in Sub-Saharan Africa —60 percent of the global poor live in the region, while East Asia and the Pacific only accounts for 3 percent of the people living on less than US$2.15 per day – this confirms incredible progress in poverty reduction in the region.
While the population of extreme poor has declined significantly in South Asia — from 563 million in 1990 to 156 million in 2019 — the region still accounts for 24 percent of the extreme poor in 2019, similar to its share of the global poor in 1990 (28 percent).
While extreme poverty is concentrated in Sub-Saharan Africa, this is not the case at higher values of the poverty line. In fact, South Asia has the highest share of the global poor at the higher poverty lines (43 percent at US$3.65 and 42 percent at US$6.85). The share of the global poor who live in the East Asia and Pacific region is also significant, at the US$6.85 poverty line: 19 percent in 2019, but considerably lower than before.
As countries grow, what is understood to be the basic cost toparticipate in societyincreases. Expressing poverty estimates at different poverty lines is one way to capture this effect by using different absolute thresholds.
Another way is to use the World Bank’sSocietal Poverty Line (SPL), a poverty measure that varies with each country’s national income. This measure was introducedin 2018and is defined asmax (US$2.15, US$1.15 + 0.5*Median). The SPL combines absolute and relative notions of poverty: it has a floor of US$2.15 at the IPL, which applies to countries with a median income of less than US$2 per person per day, as in the case of a low-income country like Malawi (median consumption per person per day in 2019 of US$1.53). Above this income level, the poverty line is set as US$1.15 plus half the national median.
Globally, just over a quarter of the world’s population lived in societal poverty in 2019 (Figure 1), not too different from the poverty rate at the US$3.65 line. Or, put differently, the poverty rate at the US$6.85 poverty line is almost double the societal poverty rate. This means that, for many middle-income countries, the US$6.85 line far exceeds the societal poverty line.
For example, 91 percent of the population in Nigeria lived on less than US$6.85 per person per day in 2018. For the same year, 43 percent of the population lived below an SPL of US$2.6. The opposite happens in a high-income country such as Germany, where 0.2% of the population lived on less than US$6.85 and 12% lived below a societal poverty line of US$29 in 2018. It is important to note that poverty estimates for Nigeria are based on a consumption measure, while Germany uses income.
Societal poverty has declined over the last three decades, but at a slower pace than the absolute definitions of poverty. This is to be expected given the definition of societal poverty: as countries grow, their poverty line is automatically adjusted upward.
Does this mean that nothing can be done to reduce societal poverty?
The answer is no.Inequality-reducing policies that support the bottom of the income distribution and reduce the gap between the groups at the bottom of the population and the median will decrease societal poverty. In this sense, the relative component of the societal poverty measure is very closely related to a measure of inequality.
The authors gratefully acknowledge financial support from the UK Government through the Data and Evidence for Tackling Extreme Poverty (DEEP) Research Program.
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