What is Poverty? Meaning, Causes, Measures and FAQs

Last Updated : 22 Apr, 2025

Poverty definition: When a person is unable to get the minimum necessities of life this situation is known as poverty. Poverty means that the income level from employment is so low or no employment that basic human needs are not met. Poverty-stricken people can go without proper housing, clean water, healthy food, and medical attention.

Progress has been made in measuring and analyzing poverty, the World Bank Organisation is working to identify other indicators and dimensions of poverty. This includes identifying social indicators to track education, health, access to services, social exclusion, and vulnerability.

Table of Content

What is Poverty?

Poverty is defined as a state or circumstance in which an individual or a group lacks financial means and necessities for a basic level of living. It can also be defined as a situation in which one's earnings from work are insufficient to meet fundamental human requirements.

Poverty, according to the World Bank, is a severe lack of well-being that has various aspects. Low earnings and the inability to obtain the essential commodities and services required for a dignified existence are examples. Poverty examples also includes poor health and education, a lack of access to safe drinking water and sanitation, a lack of physical security, a lack of voice, and a lack of capacity and chance to improve one's life. In 2011, 21.9% of India's population was living below the national poverty threshold.

Check-out: Poverty in India

Understanding Poverty

Poverty is both an individual as well as a broader social problem. On the individual level, ends are not met which can lead to physical and mental issues. At the societal level, high poverty can damper to overall economic growth and be associated with problems like unemployment, crime, urban decay, lack of education, and detrimental health.

Important points related to poverty are:

The two main dimensions of Poverty are Hunger and lack of shelter.
Poverty is a condition where one is barely having basic necessities of life. When parents are not able to send their children to school or a situation where individuals or families can't afford medical facilities
Lack of clean water and sanitation facilities is also one of the conditions of poverty.
Lack of regular job to earn or live a regular life with basic necessities of life.

Poverty as a phenomenon is as old as human existence, its significance has evolved over time. Under the traditional mode of economic production, widespread poverty had been accepted as inevitable. This meant, the total output of goods and services, even if equally divided, would still be insufficient for the entire population to lead a comfortable life. However, this was proved wrong by industrialization, as industrialized nations have outputs sufficient to raise the entire population to a comfortable level.

Aspects of Poverty

Certain important aspects of poverty are as given below:

Global Poverty

Increased level of production has led to reduction in the cost of goods, making them more affordable, while certain advancements in agriculture has increase crop yield in case of developed countries, which has led to reduction in poverty in certain developed countries.

International poverty line refers to the monetary line under which each individual is considered to be living in poverty.

It is estimated that 40 percent of the population of the world lives in poverty, with United States being highest among developed nations.

Poverty and Children

Poverty affects children tremendously. Childrens who grow up in poverty suffers from health issues and increase chances of low birth weight, leading to physical as well mental disabilities. Children suffering from poverty tend to miss schools, lack healthcare facilities and nourishment.

Check-out: Population and Poverty

Types of Poverty

There are two major kinds of Poverty, that are:

1. Cyclic Poverty

It refers to poverty that can be widespread throughout the population, but its occurrence is of limited duration. In non-industrialized countries, the inability to meet basic needs rests mainly on temporary food shortages caused by natural phenomena. Prices can be hiked because of scarcities of food, which brought misery.

2. Collective Poverty

Collective poverty involves relative permanent insufficiency of means for secure basic needs. Both generalized and concentrated collective poverty can be transmitted from one generation to the next. Collective poverty usually is related to Economic inequality.

3. Concentrated Collective Poverty

In many developed industrial countries, particular demographic groups are more vulnerable to long-term poverty. Their chief economic traits include unemployment, underemployment, unskilled occupation, and job instability.

Causes of Poverty

India's population has been continuously increasing throughout the years. It has increased at a pace of 2.2 percent per year for the past 45 years, implying that around 17 million people are added to the country's population each year. This has a significant impact on the demand for consumer products. The following important reasons are mostly responsible for poverty:

Low Agricultural Productivity

The agriculture sector's low productivity is a key source of poverty. Low productivity can be caused by a variety of factors.

It is mostly due to fragmented and subdivided landholdings, a lack of cash, ignorance about modern farming technology, the use of conventional farming practices, loss during storage, and other factors.

Inadequate Utilization of resources

The country suffers from underemployment and hidden unemployment, notably in the agricultural sector. Low agricultural productivity and a drop in living standards have ensued as a result of this.

Economic Development at a Slow Rate

India's Economic inequality has been slow, particularly in the first 40 years of independence before the LPG reforms in 1991.

Check-out: Role of Government in Reducing Poverty

Continuous Price hike

The country's price increases have been consistent, adding to the burden carried by the poor. Although a few people have profited, the lower-income groups have suffered as a result, and are unable to meet even their most basic needs.

Unemployment: It is another element that contributes to poverty in India. As the world's population grows, so does the number of people looking for work. However, the increase in possibilities is insufficient to meet the demand for work.
Social Issues: In addition to Economic inequality, social factors obstruct India's poverty eradication efforts. The laws of inheritance, the caste system, and certain customs, to name a few, are all obstacles in this respect.

How to reduce Poverty?

Poverty can be reduced with the following steps:

Shelters for construction of homes for most needed ones.
Educating farmers for production of more foods.
Access to free and clean drinking water.
Building schools for educating the disadvantaged groups.

Which Countries have Highest Poverty Rates?

The highest poverty rates can be found in countries like South Sudan, Madagascar, Malawi and Niger. According to the World Bank PovcalNet database, below are the countries with the highest poverty rates:

Rank	Countries	Poverty Rate (%)
1	South Sudan	97.0
2	Madagascar	91.3
3	Malawi	88.1
4	Central African Republic	87.1
5	Democratic Republic of Congo	84.5
6	Niger	82.9
7	Burundi	76.5
8	Mozambique	74.5
9	Zambia	74.3
10	Togo	73.7

Check-out: Measures to Remove Poverty

Latest Statistics and Research Findings on Poverty

Global Poverty Trends

According to the World Bank, the COVID-19 pandemic has significantly impacted global poverty, with an estimated increase of up to 150 million people living in extreme poverty by the end of 2021.
The poverty rate in Sub-Saharan Africa remains high, with over 40% of the population living below the international poverty line.

Poverty in Developed Countries

In the United States, the Census Bureau reported a poverty rate of 10.5% in 2020, affecting approximately 34 million Americans.
Research indicates that poverty in developed countries is often linked to systemic issues like income inequality and lack of social safety nets.

Child Poverty

UNICEF reports that approximately 356 million children worldwide live in extreme poverty, with the highest concentrations in Sub-Saharan Africa and South Asia.
Child poverty is closely linked to issues such as access to education, healthcare, and nutrition.

Impact of Poverty on Health

Studies have shown a direct correlation between poverty and health outcomes, with impoverished communities facing higher risks of diseases and lower life expectancy.
The World Health Organization highlights that poverty contributes to mental health issues, including depression and anxiety.

Poverty Alleviation Strategies

The United Nations' Sustainable Development Goals aim to eradicate extreme poverty by 2030, focusing on strategies like improving education, healthcare, and economic opportunities.
Microfinance and social entrepreneurship have emerged as effective tools in poverty reduction, empowering individuals to start businesses and improve their livelihoods.

Technological Advancements in Addressing Poverty

Technology, particularly mobile banking and information services, is playing a crucial role in providing financial services and market information to impoverished communities.
Digital education platforms are increasingly used to provide quality education in remote and impoverished areas.

Real-World Case Studies: Illustrating the Impact of Poverty

Case Study: The Slums of Mumbai, India

Background: Mumbai's slums, such as Dharavi, are home to millions living in extreme poverty.
Impact: Residents face challenges like inadequate housing, poor sanitation, and limited access to healthcare and education.
Key Insights: Despite these challenges, Dharavi is a hub of small-scale industries, showcasing the resilience and entrepreneurial spirit of its inhabitants.

Case Study: Sub-Saharan Africa's Rural Poverty

Background: Rural areas in Sub-Saharan Africa are characterized by high poverty rates.
Impact: Communities struggle with food insecurity, lack of clean water, and limited educational opportunities.
Key Insights: Efforts like microfinancing and sustainable farming practices are making strides in alleviating poverty in these regions.

Case Study: Appalachian Region, USA

Background: The Appalachian region faces economic challenges, with poverty rates above the national average.
Impact: Issues include unemployment, opioid addiction, and lack of access to healthcare.
Key Insights: Community-driven initiatives and investment in education and healthcare are crucial for poverty reduction.

Case Study: Urban Poverty in Sao Paulo, Brazil

Background: Sao Paulo's favelas are marked by high poverty and crime rates.
Impact: Overcrowding, violence, and lack of basic services are prevalent.
Key Insights: Community policing and social programs have shown promise in improving living conditions.

Case Study: Poverty and Education in Rural China

Background: Rural China has seen significant poverty, especially among children.
Impact: Many children lack access to quality education, affecting their future opportunities.
Key Insights: Government and NGO initiatives focusing on education are vital for breaking the cycle of poverty.

Conclusion

In conclusion, poverty is a big problem that affects societies everywhere. It shows up in different ways and affects people, families, and whole communities. It includes not having access to things like education, healthcare, good housing, and chances to improve financially. While progress has been made in reducing global poverty rates, much work remain left out to achieve sustainable and inclusive development. Recognizing the nature of poverty and implementing targeted strategies that addresses its various types helps in creating an equitable society where everyone has the opportunity to access the resources necessary for a dignified life. Collaboration among governments, NGOs, communities, and individuals is important in advancing towards a future where poverty is not a barrier to human potential and well-being.

Impact and Causes of Poverty

Anti-Poverty Measures

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