NBER Study Analyzes Mechanisms Behind Global Poverty Decline from 1990 to 2015
A new National Bureau of Economic Research working paper by Vincent J. Armentano, Paul Niehaus, and Tom Vogl investigates the dramatic reduction in global extreme poverty, which fell from 36% in 1990 to 9% in 2015. The study utilizes representative data from five countries responsible for 75% of this decline to distinguish between within-cohort and between-cohort contributions. The authors find that poverty reduction was primarily a within-cohort phenomenon, where overlapping birth cohorts experienced improvements simultaneously. Rather than viewing poverty as a long-term trap, the data suggest a "slippery slope" with substantial churn, indicating dynamic movement in and out of poverty. While factors such as sectoral transitions, migration, occupational changes, and increased female labor force participation contributed to some exits from poverty, the majority of households escaped extreme poverty without undergoing these specific structural changes. This research challenges conventional narratives about the primary drivers of poverty alleviation, highlighting the complexity and diversity of pathways out of poverty. The findings provide critical insights for development economics and policy formulation aimed at sustaining welfare improvements.
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NBER Study Analyzes Mechanisms Behind Global Poverty Decline from 1990 to 2015
A new National Bureau of Economic Research working paper by Vincent J. Armentano, Paul Niehaus, and Tom Vogl investigates the dramatic reduction in global extreme poverty, which fell from 36% in 1990 to 9% in 2015. The study utilizes representative data from five countries responsible for 75% of this decline to distinguish between within-cohort and between-cohort contributions. The authors find that poverty reduction was primarily a within-cohort phenomenon, where overlapping birth cohorts experienced improvements simultaneously. Rather than viewing poverty as a long-term trap, the data suggest a "slippery slope" with substantial churn, indicating dynamic movement in and out of poverty. While factors such as sectoral transitions, migration, occupational changes, and increased female labor force participation contributed to some exits from poverty, the majority of households escaped extreme poverty without undergoing these specific structural changes. This research challenges conventional narratives about the primary drivers of poverty alleviation, highlighting the complexity and diversity of pathways out of poverty. The findings provide critical insights for development economics and policy formulation aimed at sustaining welfare improvements.
National Bureau of Economic Research Working Papers