Statistics on Poverty and Absolute Income Levels

Content

1. Total numbers and percentages of people living in absolute poverty
2. Population growth and poverty reduction
3. Geographical breakdown of the numbers and percentages of people living in absolute poverty
4. Alternative numbers

1. Total numbers and percentages of people living in absolute poverty

Using the internationally accepted poverty threshold of $1.25 a day, around 900 million people lived in extreme poverty in 2010; that’s down from 1,3 billion in 2008, 1.4 billion in 2005, 1.8 billion in the early 1990s and almost 2 billion in the early 1980s.

Given the global population increase over the same period, this drop in the number of people living in absolute poverty is all the more remarkable. It means that the poverty rate as a proportion of all humanity dropped even more quickly:

That means that Millennium Development Goal 1a was achieved around 2008:

(source, MDG1a is short for Millennium Development Goal 1a)

More than 75% of the world’s population lived on less than $1 a day in 1820. Today, almost no one does in the West. In China it’s less then 20%, in South Asia 40%, in Africa half. Globally, it’s less than a quarter.

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2. Population growth and poverty reduction

The fact that global population growth and poverty reduction went hand in hand is contrary to some predictions. According to Malthus and his followers, population growth that exceeds a certain pace will inevitably hit a resource ceiling, and will result in decreasing standards of living, poverty, conflict over scarce resources, famine etc. This is called a Malthusian catastrophe. Ultimately, population growth will halt because of this, and population levels will return to the “normal” equilibrium possible within the limits offered by nature (the so-called “carrying capacity”). The data, however, show that this is too simplistic and certainly not applicable to the modern world. In fact, over the last centuries, population growth hasn’t led to scarcity, on the contrary:

(source)

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3. Geographical breakdown of the numbers and percentages of people living in absolute poverty

Here a geographic breakdown of the estimates cited above (in numbers of people):

(source)

Most progress has occurred in China. China has taken 660m people out of poverty since the early 1980s. The share of the Chinese population getting by on $1.25 a day, or less, fell from 77% in the early 80s to 14% in 2008.

The regional numbers presented in another way:

(source)

As you can see, most of the global reduction in poverty is indeed concentrated in China. The graph below is for East Asia, but that’s primarily China:

(source)

Again, this graph shows that population growth doesn’t necessarily produce poverty; on the contrary. South Asia as well - which includes India, Pakistan, and Bangladesh – saw reductions in poverty, although less substantial:

(source)

Sub-Saharan Africa also saw some reductions, although again less substantial ones:

(source)

The same is true for Brazil:

(source)

(source)

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4. Alternative numbers

There’s also this interesting study, which has some different calculations giving an even more optimistic account:

World poverty is falling. Between 1970 and 2006, the global poverty rate has been cut by nearly three quarters. The percentage of the world population living on less than $1 a day (in PPP-adjusted 2000 dollars) went from 26.8% in 1970 to 5.4% in 2006.

And this is notwithstanding an increase of world population by 80% over the same time. The decrease in poverty rates is mostly driven by China.

The study also estimates relative poverty, not only absolute poverty, or – in other words – income inequality, which is also decreasing:

This is despite rising inequality in countries such as the U.S. (see here, here, and here). More on the Gini coefficient here.

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