How much economic growth is necessary to reduce global poverty substantially?
Our World in Data presents the data and research to make progress against the world’s largest problems. This post was last updated on May 24, 2021. It draws on data and research discussed in our entries on Income Inequality, Global Extreme Poverty and Economic Growth.
Billions of people in the world are living in poverty. Adjusted for the purchasing power in each country, 85% of the world population live on less than $30 per day.
In an earlier post I said that ‘if we want global poverty to decline substantially then the economies that are home to the poorest billions of people need to grow.’ In this post I want to make this statement more concrete. I will look at the depth of global poverty today to get a quantitative sense of just how much the global income distribution would need to change to reduce global poverty substantially.
As a starting point for the discussion I will consider the inequality of incomes in the world today and think through a scenario that would allow the maximal reduction of global poverty under minimal global aggregate income growth. After calculating the minimum aggregate growth that is required to reduce global poverty substantially I will consider in which ways a possible more realistic scenario of the future might differ from the minimum scenario. Even the minimum growth scenario is one of very large economic growth.
