UNU-MERIT Working Papers Series

Poor trends - The pace of poverty reduction after the Millennium Development Agenda

Richard Bluhm, Denis de Crombrugghe & Adam Szirmai #2014-006

We review the origins of the dollar-a-day poverty line, discuss historical poverty and inequality trends, and forecast poverty rates until 2030 using a new fractional response approach. Three findings stand out. First, global poverty reduction since 1981 has been rapid but regional trends are heterogeneous. Second, the pace of poverty reduction at 1.25$ a day will slow down. Our optimistic scenarios suggest a poverty rate of 8-9% in 2030, far short of the World Bank's new 3% target. Third, rapid progress can be maintained at 2$ a day, with an additional one billion people crossing that line by 2030.

Keywords: poverty, inequality, consumption growth

JEL Classification: I32, O10, O15

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