Income Poverty

The latest global numbers

The World Bank just updated its estimates of the number of people living in poverty to 1996 and 1998, using 1993 Purchasing Power Parities (PPP) and household survey data (see Table 1 and Table 2). The figures for 1998 are preliminary estimates, based on the most recent survey data available (only a few surveys are available for 1997 and 1998) and actual or estimated growth rates in real private consumption per capita; they will be firmed up as new survey data become available.

What story do the new figures tell? First, both the share of population and the number of people living on less than a dollar a day declined substantially in the mid-1990s, after increasing in the early 1990s. The same is true for those living below two dollars a day. But the numbers rose again in the aftermath of the global financial crisis.

• The declines in the numbers are almost exclusively due to a reduction in the number of poor people in East Asia, most notably in China. But progress was partly reversed by the crisis, and stalled in China.
• In South Asia, the incidence of poverty (the share of the population living in poverty) did decline moderately through the 1990s but not sufficiently to reduce the absolute number of poor. The actual number of poor people in the region has been rising steadily since 1987.
• In Africa, the share declined and the numbers increased as well. The new estimates indicate that Africa is now the region with the largest share of people living below $1/day.
• In Latin America the share of poor people remained roughly constant over the period, and the numbers increased.
• In the countries of the former Soviet bloc, poverty rose markedly—both the share and the numbers increased.

Table 1. Population living on less than $1 per day and headcount index in developing and transitional economies, selected years, 1987-1998

Notes: The numbers are estimated from those countries in each region for which at least one survey was available during the period 1985-98. The proportion of the population covered by such surveys is given in Column 1. Survey dates often do not coincide with the dates in the above table. To line up with the above dates, the survey estimates were adjusted using the closest available survey for each country and applying the consumption growth rate from national accounts. Using the assumption that the sample of countries covered by surveys is representative of the region as a whole, the numbers of poor are then estimated by region. This assumption is obviously less robust in the regions with the lowest survey coverage. The headcount index is the percentage of the population below the poverty line. Further details on data and methodology can be found in World Bank (forthcoming) and Chen and Ravallion (forthcoming) "Global Poverty Measures 1987-1998 and Projections for the Future". Washington, D.C.: World Bank.

Table 2. Population living on less than $2 per day and headcount index in developing and transitional economies, selected years, 1987-1998

Notes: The numbers are estimated from those countries in each region for which at least one survey was available during the period 1985-98. The proportion of the population covered by such surveys is given in Column 1. Survey dates often do not coincide with the dates in the above table. To line up with the above dates, the survey estimates were adjusted using the closest available survey for each country and applying the consumption growth rate from national accounts. Using the assumption that the sample of countries covered by surveys is representative of the region as a whole, the numbers of poor are then estimated by region. This assumption is obviously less robust in the regions with the lowest survey coverage. The headcount index is the percentage of the population below the poverty line. Further details on data and methodology can be found in World Bank (forthcoming) and Chen and Ravallion (forthcoming) "Global Poverty Measures 1987-1998 and Projections for the Future". Washington, D.C.: World Bank.

Read the details on the methodology for the global income poverty estimates.

Next: Income Poverty: Recent Regional Trends