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Smart decisions about where to focus poverty alleviation projects depend on accurate projections of where the bulk of the world’s poor will be living in 10, 20 years or more. So far, though, the picture has been murky. Data limitations and an abundance of modeling strategies complicate forecasts and contribute to wide discrepancies.
In this working paper, Peter Edward and Andy Sumner introduce new model of growth, inequality, and poverty that allows comparison of a wide range of input assumptions. They find that it is plausible that $1.25 and $2 global poverty will reduce substantially by 2030 and the former – $1.25 poverty – could be very low by that time. However, this depends a lot on economic growth and inequality trends—up to almost an extra billion $2 poor people in one scenario.
Where the world’s poor will reside also depends on inequality trends and the methods used to estimate poverty. The authors find little compelling evidence that global poverty will be based in low-income fragile states, and they suggest policymakers take into account the greater variety of country categories that will be home to the future of global poverty.
Data disclosure: The data underlying this analysis are available as a data set.