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  • v.44(5); 2020 Oct

Poverty and mental health: policy, practice and research implications

Lee knifton.

1 Centre for Health Policy, University of Strathclyde, Scotland, and Mental Health Foundation, Scotland and Northern Ireland

Greig Inglis

2 University of West of Scotland, Paisley

Associated Data

For supplementary material accompanying this paper visit https://doi.org/10.1192/bjb.2020.78.

This article examines the relationship between poverty and mental health problems. We draw on the experience of Glasgow, our home city, which contains some of Western Europe's areas of greatest concentrated poverty and poorest health outcomes. We highlight how mental health problems are related directly to poverty, which in turn underlies wider health inequalities. We then outline implications for psychiatry.

Doctors have often played leading roles in social movements to improve the public's health. These range from the early days of John Snow isolating the role of contaminated water supplies in spreading cholera, through to advocating harm reduction, challenging HIV stigma and, more recently, highlighting the public health catastrophe of mass incarceration in the USA. 1 Almost all examples are rooted in poverty. There is now increasing recognition that mental health problems form the greatest public health challenge of our time, and that the poor bear the greatest burden of mental illness. 2

Our article draws on data from Scotland, and especially Glasgow, which contains some of the areas of greatest need and widest health inequalities in Western Europe. However, the relationship between poverty, social stress and mental health problems is not a new phenomenon and was reported by social psychiatrists half a century ago in Langner & Michael's 1963 New York study 3 and consistently since then. Poverty is both a cause of mental health problems and a consequence. Poverty in childhood and among adults can cause poor mental health through social stresses, stigma and trauma. Equally, mental health problems can lead to impoverishment through loss of employment or underemployment, or fragmentation of social relationships. This vicious cycle is in reality even more complex, as many people with mental health problems move in and out of poverty, living precarious lives.

Poverty and mental health

The mental health of individuals is shaped by the social, environmental and economic conditions in which they are born, grow, work and age. 4 – 7 Poverty and deprivation are key determinants of children's social and behavioural development 8 , 9 and adult mental health. 10 In Scotland, individuals living in the most deprived areas report higher levels of mental ill health and lower levels of well-being than those living in the most affluent areas. In 2018 for example, 23% of men and 26% of women living in the most deprived areas of Scotland reported levels of mental distress indicative of a possible psychiatric disorder, compared with 12 and 16% of men and women living in the least deprived areas. 11 There is also a clear relationship between area deprivation and suicide in Scotland, with suicides three times more likely in the least than in the most deprived areas. 12

Inequalities in mental health emerge early in life and become more pronounced throughout childhood. In one cohort study, 7.3% of 4-year-olds in the most deprived areas of Glasgow were rated by their teacher as displaying ‘abnormal’ social, behavioural and emotional difficulties, compared with only 4.1% in the least deprived areas. By age 7, the gap between these groups had widened substantially: 14.7% of children in the most deprived areas were rated as having ‘abnormal’ difficulties, compared with 3.6% of children in the least deprived. 13 National data from parental ratings of children's behaviour show a similar pattern: at around 4 years of age, 20% of children living in the most deprived areas of Scotland are rated as having ‘borderline’ or ‘abnormal’ levels of difficulties, compared with only 7% living in the least deprived areas. 14

These findings reflect a broader pattern of socioeconomic inequalities in health that is observed internationally. 15 The primary causes of these inequalities are structural differences in socioeconomic groups’ access to economic, social and political resources, which in turn affect health through a range of more immediate environmental, psychological and behavioural processes. 16 , 17 A wide range of risk factors are more prevalent among low income groups for example, including low levels of perceived control 18 and unhealthy behaviours such as smoking and low levels of physical activity, 11 although these are best understood as mechanisms that link the structural causes of inequality to health outcomes. 17

Excess mortality and mental health in Glasgow

Glasgow has some of the highest Scottish rates of income deprivation, working-age adults claiming out of work benefits, and children living in low-income families. 19 Moreover, the city also reports poor mental health, relative to the Scottish average, on a host of indicators, including lower mental well-being and life satisfaction, and higher rates of common mental health problems, prescriptions for anxiety, depression or psychosis, and greater numbers of patients with hospital admissions for psychiatric conditions. 19

These statistics are consistent with Glasgow's overall health profile and high rates of mortality. Life expectancy in Glasgow is the lowest in Scotland. For example, men and women born in Glasgow in 2016–2018 can expect to live 3.6 and 2.7 fewer years respectively than the Scottish average. 20 Within Glasgow, men and women living in the most deprived areas of the city can expect to live 13.5 and 10.7 fewer years respectively than those living in the least deprived areas. 21

The high level of mortality in Glasgow can largely be attributed to the effects of deprivation and poverty in the city, although high levels of excess mortality have also been recorded in Glasgow, meaning a significant level of mortality in excess of that which can be explained by deprivation. For example, premature mortality (deaths under 65 years of age) is 30% higher in Glasgow compared with Liverpool and Manchester, despite the similar levels of deprivation between these cities. 22 Crucially, this excess premature mortality is in large part driven by higher rates of ‘deaths of despair’ 23 in Glasgow, namely deaths from suicide and alcohol- and drug-related causes. 22

It has been proposed that excess mortality in Glasgow can be explained by a number of historical processes that have rendered the city especially vulnerable to the hazardous effects of deprivation and poverty. These include the lagged effects of historically high levels of deprivation and overcrowding; regional policies that saw industry and sections of the population moved out of Glasgow; the nature of urban change in Glasgow during the post-war period and its effects on living conditions and social connections; and local government responses to UK policies during the 1980s. 24 On the last point, Walsh and colleagues 24 describe how the UK government introduced a host of neoliberal policies during this period – including rapid deindustrialisation – that had particularly adverse effects in cities such as Glasgow, Manchester and Liverpool. While Manchester and Liverpool were able to mitigate the negative effects of these national policies to some extent by pursuing urban regeneration and mobilising the political participation of citizens, there were fewer such efforts made in Glasgow, which contributed to the diverging health profiles of the cities.

These researchers have also suggested that this excess mortality may partly reflect an inadequate measurement of deprivation. 24 However, that does not capture the reality of living in poverty. One aspect of this lived experience that may be important is the experience of poverty-based stigma and discrimination. 25 Stigma is a fundamental cause of health inequalities, 26 and international evidence has demonstrated that poverty stigma is associated with poor mental health among low-income groups. 27 Individuals living in socioeconomically deprived areas may also experience ‘spatial’ stigma, which similarly has a range of adverse health effects for residents 28 and, crucially, may be unintentionally exacerbated by media and public health professionals’ reports of regional health inequalities. 29 Given the continued focus on Glasgow's relatively poor health it is possible that the city is more vulnerable to such stigmatising processes. However, we stress that additional research will be required to test whether stigma is an important aspect of the lived reality of poverty, particularly as several psychosocial explanations have already been offered for the excess mortality, with varying levels of supporting evidence. 24 The notion of intersectional stigma is also gaining traction and requires further research.

Understanding the life-course impact of poverty on mental health is also important. Childhood adversity is one mechanism through which poverty and deprivation have an impact on mental health. Adverse childhood experiences, such as exposure to abuse or household dysfunction, are relatively common in the population. Marryat & Frank examined the prevalence of seven adverse childhood experiences among children born in 2004–2005 in Scotland, and found that approximately two-thirds had experienced at least one adverse experience by age 8. 30 Moreover, the prevalence was greatest in low-income households: only 1% of children in the highest-income households had four or more adverse childhood experiences, compared with 10.8% in the lowest-income households. Adverse childhood experiences are also strong predictors of mental health in adulthood: individuals who have experienced at least four are at a considerably greater risk of mental ill health, problematic alcohol use and drug misuse. 31 It has also been suggested that experiences of childhood adversity and complex trauma may contribute to Glasgow's – and Scotland's – excess mortality, particularly that which is attributable to violence, suicide and alcohol and drug-related deaths. 32 The implications are significant for psychiatry. Not only does it offer a broader explanation of causation; it also highlights the importance of supporting early interventions for young people's mental health and supporting the families – including children – of those experiencing mental health problems.


When faced with the scale of the challenge the response can be daunting. This is especially so at a time when we see increasing poverty and socioeconomic inequalities within our society and challenging political conditions. The complexity and enduring nature of the problems necessitate a multilevel response from psychiatry across practice, policy, advocacy and research, which we explore in this section. We argue that this response should address three broad areas.

Reinvigorate social psychiatry and influence public policy

The demise of social psychiatry in the UK and USA in recent decades has deflected focus away from the social causes and consequences of mental health problems at the very time that social inequalities have been increasing. Now is the time to renew social psychiatry at professional and academic levels. There is considerable scope to form alliances with other areas – especially public mental health agencies and charities. Psychiatry as a profession should support those advocating for progressive public policies to reduce poverty and its impact. If we do not, then, as Phelan and colleagues outline, we will focus only on the intermediate causes of health inequalities, rather than the fundamental causes, and this will ensure that these inequalities persist and are reproduced over time. 33 Activism with those who have consistently highlighted the links between poverty and mental health problems, such as The Equality Trust, may effect change among policy makers.

Tackle intersectional stigma and disadvantage

We must understand, research and tackle stigma in a much more sophisticated way by recognising that mental health stigma does not sit in isolation. We need to understand and address what Turan and colleagues define as intersectional stigma. 34 Intersectional stigma explains the convergence of multiple stigmatised identities that can include ethnicity, gender, sexuality, poverty and health status. This can then magnify the impact on the person's life. In this context, the reality is that you have a much greater chance of getting a mental health problem if you experience poverty. And if you do, then you will likely experience more stigma and discrimination. Its impact on your life will be greater, for example on precarious employment, housing, education and finances. It is harder to recover and the impact on family members may be magnified. Intersectional stigma remains poorly researched and understood, 35 although the health impact of poverty stigma is now emerging as an important issue in studies in Glasgow and elsewhere. 25

Embed poverty-aware practice and commissioning

We conclude with our third idea, to ensure that poverty-aware practice is embedded in services through commissioning, training and teaching. This means that recognising and responding to poverty is part of assessments and care. Income maximisation schemes should be available as an important dimension of healthcare: how to access benefits, manage debt, access local childcare and access support for employment at the earliest stages. This needs to be matched by a major investment in mental health services focused on low-income areas, to address the inverse care law. 36 These principles are already being put into action. For example across Scotland, including Glasgow, several general practices working in the most deprived areas (referred to as Deep End practices) have recently trialled the integration of money advice workers within primary care, which has generated considerable financial gains for patients. 37

About the authors

Lee Knifton is Reader and Co-Director of the Centre for Health Policy at the University of Strathclyde, Scotland, and Director of the Mental Health Foundation, Scotland and Northern Ireland. Greig Inglis is a lecturer in psychology at the University of West of Scotland, Paisley, Scotland.

Author contributions

Both authors were fully and equally involved in the design of the article, drafting the article and making revisions to the final version and are accountable for the integrity of the work.

Declaration of interest

Supplementary material.

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2.4 The Consequences of Poverty

Learning objectives.

  • Describe the family and housing problems associated with poverty.
  • Explain how poverty affects health and educational attainment.

Regardless of its causes, poverty has devastating consequences for the people who live in it. Much research conducted and/or analyzed by scholars, government agencies, and nonprofit organizations has documented the effects of poverty (and near poverty) on the lives of the poor (Lindsey, 2009; Moore, et. al., 2009; Ratcliffe & McKernan, 2010; Sanders, 2011). Many of these studies focus on childhood poverty, and these studies make it very clear that childhood poverty has lifelong consequences. In general, poor children are more likely to be poor as adults, more likely to drop out of high school, more likely to become a teenaged parent, and more likely to have employment problems. Although only 1 percent of children who are never poor end up being poor as young adults, 32 percent of poor children become poor as young adults (Ratcliffe & McKernan, 2010).


Poor children are more likely to have inadequate nutrition and to experience health, behavioral, and cognitive problems.

Kelly Short – Poverty: “Damaged Child,” Oklahoma City, OK, USA, 1936. (Colorized). – CC BY-SA 2.0.

A recent study used government data to follow children born between 1968 and 1975 until they were ages 30 to 37 (Duncan & Magnuson, 2011). The researchers compared individuals who lived in poverty in early childhood to those whose families had incomes at least twice the poverty line in early childhood. Compared to the latter group, adults who were poor in early childhood

  • had completed two fewer years of schooling on the average;
  • had incomes that were less than half of those earned by adults who had wealthier childhoods;
  • received $826 more annually in food stamps on the average;
  • were almost three times more likely to report being in poor health;
  • were twice as likely to have been arrested (males only); and
  • were five times as likely to have borne a child (females only).

We discuss some of the major specific consequences of poverty here and will return to them in later chapters.

Family Problems

The poor are at greater risk for family problems, including divorce and domestic violence. As Chapter 9 “Sexual Behavior” explains, a major reason for many of the problems families experience is stress. Even in families that are not poor, running a household can cause stress, children can cause stress, and paying the bills can cause stress. Families that are poor have more stress because of their poverty, and the ordinary stresses of family life become even more intense in poor families. The various kinds of family problems thus happen more commonly in poor families than in wealthier families. Compounding this situation, when these problems occur, poor families have fewer resources than wealthier families to deal with these problems.

Children and Our Future

Getting under Children’s Skin: The Biological Effects of Childhood Poverty

As the text discusses, childhood poverty often has lifelong consequences. Poor children are more likely to be poor when they become adults, and they are at greater risk for antisocial behavior when young, and for unemployment, criminal behavior, and other problems when they reach adolescence and young adulthood.

According to growing evidence, one reason poverty has these consequences is that it has certain neural effects on poor children that impair their cognitive abilities and thus their behavior and learning potential. As Greg J. Duncan and Katherine Magnuson (Duncan & Magnuson, 2011, p. 23) observe, “Emerging research in neuroscience and developmental psychology suggests that poverty early in a child’s life may be particularly harmful because the astonishingly rapid development of young children’s brains leaves them sensitive (and vulnerable) to environmental conditions.”

In short, poverty can change the way the brain develops in young children. The major reason for this effect is stress. Children growing up in poverty experience multiple stressful events: neighborhood crime and drug use; divorce, parental conflict, and other family problems, including abuse and neglect by their parents; parental financial problems and unemployment; physical and mental health problems of one or more family members; and so forth. Their great levels of stress in turn affect their bodies in certain harmful ways. As two poverty scholars note, “It’s not just that poverty-induced stress is mentally taxing. If it’s experienced early enough in childhood, it can in fact get ‘under the skin’ and change the way in which the body copes with the environment and the way in which the brain develops. These deep, enduring, and sometimes irreversible physiological changes are the very human price of running a high-poverty society” (Grusky & Wimer, 2011, p. 2).

One way poverty gets “under children’s skin” is as follows (Evans, et. al., 2011). Poor children’s high levels of stress produce unusually high levels of stress hormones such as cortisol and higher levels of blood pressure. Because these high levels impair their neural development, their memory and language development skills suffer. This result in turn affects their behavior and learning potential. For other physiological reasons, high levels of stress also affect the immune system, so that poor children are more likely to develop various illnesses during childhood and to have high blood pressure and other health problems when they grow older, and cause other biological changes that make poor children more likely to end up being obese and to have drug and alcohol problems.

The policy implications of the scientific research on childhood poverty are clear. As public health scholar Jack P. Shonkoff (Shonkoff, 2011) explains, “Viewing this scientific evidence within a biodevelopmental framework points to the particular importance of addressing the needs of our most disadvantaged children at the earliest ages.” Duncan and Magnuson (Duncan & Magnuson, 2011) agree that “greater policy attention should be given to remediating situations involving deep and persistent poverty occurring early in childhood.” To reduce poverty’s harmful physiological effects on children, Skonkoff advocates efforts to promote strong, stable relationships among all members of poor families; to improve the quality of the home and neighborhood physical environments in which poor children grow; and to improve the nutrition of poor children. Duncan and Magnuson call for more generous income transfers to poor families with young children and note that many European democracies provide many kinds of support to such families. The recent scientific evidence on early childhood poverty underscores the importance of doing everything possible to reduce the harmful effects of poverty during the first few years of life.

Health, Illness, and Medical Care

The poor are also more likely to have many kinds of health problems, including infant mortality, earlier adulthood mortality, and mental illness, and they are also more likely to receive inadequate medical care. Poor children are more likely to have inadequate nutrition and, partly for this reason, to suffer health, behavioral, and cognitive problems. These problems in turn impair their ability to do well in school and land stable employment as adults, helping to ensure that poverty will persist across generations. Many poor people are uninsured or underinsured, at least until the US health-care reform legislation of 2010 takes full effect a few years from now, and many have to visit health clinics that are overcrowded and understaffed.

As Chapter 12 “Work and the Economy” discusses, it is unclear how much of poor people’s worse health stems from their lack of money and lack of good health care versus their own behavior such as smoking and eating unhealthy diets. Regardless of the exact reasons, however, the fact remains that poor health is a major consequence of poverty. According to recent research, this fact means that poverty is responsible for almost 150,000 deaths annually, a figure about equal to the number of deaths from lung cancer (Bakalar, 2011).

Poor children typically go to rundown schools with inadequate facilities where they receive inadequate schooling. They are much less likely than wealthier children to graduate from high school or to go to college. Their lack of education in turn restricts them and their own children to poverty, once again helping to ensure a vicious cycle of continuing poverty across generations. As Chapter 10 “The Changing Family” explains, scholars debate whether the poor school performance of poor children stems more from the inadequacy of their schools and schooling versus their own poverty. Regardless of exactly why poor children are more likely to do poorly in school and to have low educational attainment, these educational problems are another major consequence of poverty.

Housing and Homelessness

The poor are, not surprisingly, more likely to be homeless than the nonpoor but also more likely to live in dilapidated housing and unable to buy their own homes. Many poor families spend more than half their income on rent, and they tend to live in poor neighborhoods that lack job opportunities, good schools, and other features of modern life that wealthier people take for granted. The lack of adequate housing for the poor remains a major national problem. Even worse is outright homelessness. An estimated 1.6 million people, including more than 300,000 children, are homeless at least part of the year (Lee, et. al., 2010).

Crime and Victimization

As Chapter 7 “Alcohol and Other Drugs” discusses, poor (and near poor) people account for the bulk of our street crime (homicide, robbery, burglary, etc.), and they also account for the bulk of victims of street crime. That chapter will outline several reasons for this dual connection between poverty and street crime, but they include the deep frustration and stress of living in poverty and the fact that many poor people live in high-crime neighborhoods. In such neighborhoods, children are more likely to grow up under the influence of older peers who are already in gangs or otherwise committing crime, and people of any age are more likely to become crime victims. Moreover, because poor and near-poor people are more likely to commit street crime, they also comprise most of the people arrested for street crimes, convicted of street crime, and imprisoned for street crime. Most of the more than 2 million people now in the nation’s prisons and jails come from poor or near-poor backgrounds. Criminal behavior and criminal victimization, then, are other major consequences of poverty.

Lessons from Other Societies

Poverty and Poverty Policy in Other Western Democracies

To compare international poverty rates, scholars commonly use a measure of the percentage of households in a nation that receive less than half of the nation’s median household income after taxes and cash transfers from the government. In data from the late 2000s, 17.3 percent of US households lived in poverty as defined by this measure. By comparison, other Western democracies had the rates depicted in the figure that follows. The average poverty rate of the nations in the figure excluding the United States is 9.5 percent. The US rate is thus almost twice as high as the average for all the other democracies.

A graph of the Percentage of People Living in Poverty, from lowest to highest, it is: Denmark, Iceland, Netherlands, France, Norway, Finland, Sweden, Switzerland, Germany, Belgium, The average (excluding the US), Ireland, United Kingdom, Canada, Italy, Greece, Portugal, Spain, and at the highest spot, the United States.

This graph illustrates the poverty rates in western democracies (i.e., the percentage of persons living with less than half of the median household income) as of the late 2000s

Source: Data from Organisation for Economic Co-operation and Development (OECD). (2011). Society at a glance 2011: OECD social indicators. Retrieved July 23, 2011, from http://www.oecd-ilibrary.org/sites/soc_glance-2011-en/06/02/index.html;jsessionid=erdqhbpb203ea.epsilon?contentType=&itemId=/content/chapter/soc_glance-2011-17-en&containerItemId=/content/se .

Why is there so much more poverty in the United States than in its Western counterparts? Several differences between the United States and the other nations stand out (Brady, 2009; Russell, 2011). First, other Western nations have higher minimum wages and stronger labor unions than the United States has, and these lead to incomes that help push people above poverty. Second, these other nations spend a much greater proportion of their gross domestic product on social expenditures (income support and social services such as child-care subsidies and housing allowances) than does the United States. As sociologist John Iceland (Iceland, 2006) notes, “Such countries often invest heavily in both universal benefits, such as maternity leave, child care, and medical care, and in promoting work among [poor] families…The United States, in comparison with other advanced nations, lacks national health insurance, provides less publicly supported housing, and spends less on job training and job creation.” Block and colleagues agree: “These other countries all take a more comprehensive government approach to combating poverty, and they assume that it is caused by economic and structural factors rather than bad behavior” (Block et, al., 2006).

The experience of the United Kingdom provides a striking contrast between the effectiveness of the expansive approach used in other wealthy democracies and the inadequacy of the American approach. In 1994, about 30 percent of British children lived in poverty; by 2009, that figure had fallen by more than half to 12 percent. Meanwhile, the US 2009 child poverty rate, was almost 21 percent.

Britain used three strategies to reduce its child poverty rate and to help poor children and their families in other ways. First, it induced more poor parents to work through a series of new measures, including a national minimum wage higher than its US counterpart and various tax savings for low-income workers. Because of these measures, the percentage of single parents who worked rose from 45 percent in 1997 to 57 percent in 2008. Second, Britain increased child welfare benefits regardless of whether a parent worked. Third, it increased paid maternity leave from four months to nine months, implemented two weeks of paid paternity leave, established universal preschool (which both helps children’s cognitive abilities and makes it easier for parents to afford to work), increased child-care aid, and made it possible for parents of young children to adjust their working hours to their parental responsibilities (Waldfogel, 2010). While the British child poverty rate fell dramatically because of these strategies, the US child poverty rate stagnated.

In short, the United States has so much more poverty than other democracies in part because it spends so much less than they do on helping the poor. The United States certainly has the wealth to follow their example, but it has chosen not to do so, and a high poverty rate is the unfortunate result. As the Nobel laureate economist Paul Krugman (2006, p. A25) summarizes this lesson, “Government truly can be a force for good. Decades of propaganda have conditioned many Americans to assume that government is always incompetent…But the [British experience has] shown that a government that seriously tries to reduce poverty can achieve a lot.”

Key Takeaways

  • Poor people are more likely to have several kinds of family problems, including divorce and family conflict.
  • Poor people are more likely to have several kinds of health problems.
  • Children growing up in poverty are less likely to graduate high school or go to college, and they are more likely to commit street crime.

For Your Review

  • Write a brief essay that summarizes the consequences of poverty.
  • Why do you think poor children are more likely to develop health problems?

Bakalar, N. (2011, July 4). Researchers link deaths to social ills. New York Times , p. D5.

Block, F., Korteweg, A. C., & Woodward, K. (2006). The compassion gap in American poverty policy. Contexts, 5 (2), 14–20.

Brady, D. (2009). Rich democracies, poor people: How politics explain poverty . New York, NY: Oxford University Press.

Duncan, G. J., & Magnuson, K. (2011, winter). The long reach of early childhood poverty. Pathways: A Magazine on Poverty, Inequality, and Social Policy , 22–27.

Evans, G. W., Brooks-Gunn, J., & Klebanov, P. K. (2011, winter). Stressing out the poor: Chronic physiological stress and the income-achievement gap. Pathways: A Magazine on Poverty, Inequality, and Social Policy , 16–21.

Grusky, D., & Wimer, C.(Eds.). (2011, winter). Editors’ note. Pathways: A Magazine on Poverty, Inequality, and Social Policy , 2.

Iceland, J. (2006). Poverty in America: A handbook . Berkeley, CA: University of California Press.

Krugman, P. (Krugman, 2006). Helping the poor, the British way. New York Times , p. A25.

Lee, B., Tyler, K. A., & Wright, J. D. ( 2010). The new homelessness revisited. Annual Review of Sociology, 36 , 501–521.

Lindsey, D. (2009). Child poverty and inequality: Securing a better future for America’s children . New York, NY: Oxford University Press.

Moore, K. A., Redd, Z., Burkhauser, M., Mbawa, K., & Collins, A. (2009). Children in poverty: Trends, consequences, and policy options . Washington, DC: Child Trends. Retrieved from http://www.childtrends.org/Files//Child_Trends-2009_04_07_RB_ChildreninPoverty.pdf .

Ratcliffe, C., & McKernan, S.-M. (2010). Childhood poverty persistence: Facts and consequences . Washington, DC: Urban Institute Press.

Russell, J. W. ( 2011). Double standard: Social policy in Europe and the United States (2nd ed.). Lanham, MD: Rowman & Littlefield.

Sanders, L. (2011). Neuroscience exposes pernicious effects of poverty. Science News, 179 (3), 32.

Shonkoff, J. P. (2011, winter). Building a foundation for prosperity on the science of early childhood development. Pathways: A Magazine on Poverty, Inequality, and Social Policy , 10–14.

Waldfogel, J. (2010). Britain’s war on poverty . New York, NY: Russell Sage Foundation.

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A color photograph of a mother and son in a car. Both are holding dogs on their laps and a third dog lays his head over the passenger seat.

Why Poverty Persists in America

A Pulitzer Prize-winning sociologist offers a new explanation for an intractable problem.

A mother and son living in a Walmart parking lot in North Dakota in 2012. Credit... Eugene Richards

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By Matthew Desmond

  • Published March 9, 2023 Updated April 3, 2023

In the past 50 years, scientists have mapped the entire human genome and eradicated smallpox. Here in the United States, infant-mortality rates and deaths from heart disease have fallen by roughly 70 percent, and the average American has gained almost a decade of life. Climate change was recognized as an existential threat. The internet was invented.

On the problem of poverty, though, there has been no real improvement — just a long stasis. As estimated by the federal government’s poverty line, 12.6 percent of the U.S. population was poor in 1970; two decades later, it was 13.5 percent; in 2010, it was 15.1 percent; and in 2019, it was 10.5 percent. To graph the share of Americans living in poverty over the past half-century amounts to drawing a line that resembles gently rolling hills. The line curves slightly up, then slightly down, then back up again over the years, staying steady through Democratic and Republican administrations, rising in recessions and falling in boom years.

What accounts for this lack of progress? It cannot be chalked up to how the poor are counted: Different measures spit out the same embarrassing result. When the government began reporting the Supplemental Poverty Measure in 2011, designed to overcome many of the flaws of the Official Poverty Measure, including not accounting for regional differences in costs of living and government benefits, the United States officially gained three million more poor people. Possible reductions in poverty from counting aid like food stamps and tax benefits were more than offset by recognizing how low-income people were burdened by rising housing and health care costs.

The American poor have access to cheap, mass-produced goods, as every American does. But that doesn’t mean they can access what matters most.

Any fair assessment of poverty must confront the breathtaking march of material progress. But the fact that standards of living have risen across the board doesn’t mean that poverty itself has fallen. Forty years ago, only the rich could afford cellphones. But cellphones have become more affordable over the past few decades, and now most Americans have one, including many poor people. This has led observers like Ron Haskins and Isabel Sawhill, senior fellows at the Brookings Institution, to assert that “access to certain consumer goods,” like TVs, microwave ovens and cellphones, shows that “the poor are not quite so poor after all.”

No, it doesn’t. You can’t eat a cellphone. A cellphone doesn’t grant you stable housing, affordable medical and dental care or adequate child care. In fact, as things like cellphones have become cheaper, the cost of the most necessary of life’s necessities, like health care and rent, has increased. From 2000 to 2022 in the average American city, the cost of fuel and utilities increased by 115 percent. The American poor, living as they do in the center of global capitalism, have access to cheap, mass-produced goods, as every American does. But that doesn’t mean they can access what matters most. As Michael Harrington put it 60 years ago: “It is much easier in the United States to be decently dressed than it is to be decently housed, fed or doctored.”

Why, then, when it comes to poverty reduction, have we had 50 years of nothing? When I first started looking into this depressing state of affairs, I assumed America’s efforts to reduce poverty had stalled because we stopped trying to solve the problem. I bought into the idea, popular among progressives, that the election of President Ronald Reagan (as well as that of Prime Minister Margaret Thatcher in the United Kingdom) marked the ascendancy of market fundamentalism, or “neoliberalism,” a time when governments cut aid to the poor, lowered taxes and slashed regulations. If American poverty persisted, I thought, it was because we had reduced our spending on the poor. But I was wrong.

A black-and-white photograph of a family in a car. The mother is laying down in the front looking up despondently. Two children are crouched in the back. A boy looks out from under pieces of furniture looking directly into the camera from the shadows.

Reagan expanded corporate power, deeply cut taxes on the rich and rolled back spending on some antipoverty initiatives, especially in housing. But he was unable to make large-scale, long-term cuts to many of the programs that make up the American welfare state. Throughout Reagan’s eight years as president, antipoverty spending grew, and it continued to grow after he left office. Spending on the nation’s 13 largest means-tested programs — aid reserved for Americans who fall below a certain income level — went from $1,015 a person the year Reagan was elected president to $3,419 a person one year into Donald Trump’s administration, a 237 percent increase.

Most of this increase was due to health care spending, and Medicaid in particular. But even if we exclude Medicaid from the calculation, we find that federal investments in means-tested programs increased by 130 percent from 1980 to 2018, from $630 to $1,448 per person.

“Neoliberalism” is now part of the left’s lexicon, but I looked in vain to find it in the plain print of federal budgets, at least as far as aid to the poor was concerned. There is no evidence that the United States has become stingier over time. The opposite is true.

This makes the country’s stalled progress on poverty even more baffling. Decade after decade, the poverty rate has remained flat even as federal relief has surged.

If we have more than doubled government spending on poverty and achieved so little, one reason is that the American welfare state is a leaky bucket. Take welfare, for example: When it was administered through the Aid to Families With Dependent Children program, almost all of its funds were used to provide single-parent families with cash assistance. But when President Bill Clinton reformed welfare in 1996, replacing the old model with Temporary Assistance for Needy Families (TANF), he transformed the program into a block grant that gives states considerable leeway in deciding how to distribute the money. As a result, states have come up with rather creative ways to spend TANF dollars. Arizona has used welfare money to pay for abstinence-only sex education. Pennsylvania diverted TANF funds to anti-abortion crisis-pregnancy centers. Maine used the money to support a Christian summer camp. Nationwide, for every dollar budgeted for TANF in 2020, poor families directly received just 22 cents.

We’ve approached the poverty question by pointing to poor people themselves, when we should have been focusing on exploitation.

A fair amount of government aid earmarked for the poor never reaches them. But this does not fully solve the puzzle of why poverty has been so stubbornly persistent, because many of the country’s largest social-welfare programs distribute funds directly to people. Roughly 85 percent of the Supplemental Nutrition Assistance Program budget is dedicated to funding food stamps themselves, and almost 93 percent of Medicaid dollars flow directly to beneficiaries.

There are, it would seem, deeper structural forces at play, ones that have to do with the way the American poor are routinely taken advantage of. The primary reason for our stalled progress on poverty reduction has to do with the fact that we have not confronted the unrelenting exploitation of the poor in the labor, housing and financial markets.

As a theory of poverty, “exploitation” elicits a muddled response, causing us to think of course and but, no in the same instant. The word carries a moral charge, but social scientists have a fairly coolheaded way to measure exploitation: When we are underpaid relative to the value of what we produce, we experience labor exploitation; when we are overcharged relative to the value of something we purchase, we experience consumer exploitation. For example, if a family paid $1,000 a month to rent an apartment with a market value of $20,000, that family would experience a higher level of renter exploitation than a family who paid the same amount for an apartment with a market valuation of $100,000. When we don’t own property or can’t access credit, we become dependent on people who do and can, which in turn invites exploitation, because a bad deal for you is a good deal for me.

Our vulnerability to exploitation grows as our liberty shrinks. Because labor laws often fail to protect undocumented workers in practice, more than a third are paid below minimum wage, and nearly 85 percent are not paid overtime. Many of us who are U.S. citizens, or who crossed borders through official checkpoints, would not work for these wages. We don’t have to. If they migrate here as adults, those undocumented workers choose the terms of their arrangement. But just because desperate people accept and even seek out exploitative conditions doesn’t make those conditions any less exploitative. Sometimes exploitation is simply the best bad option.

Consider how many employers now get one over on American workers. The United States offers some of the lowest wages in the industrialized world. A larger share of workers in the United States make “low pay” — earning less than two-thirds of median wages — than in any other country belonging to the Organization for Economic Cooperation and Development. According to the group, nearly 23 percent of American workers labor in low-paying jobs, compared with roughly 17 percent in Britain, 11 percent in Japan and 5 percent in Italy. Poverty wages have swollen the ranks of the American working poor, most of whom are 35 or older.

One popular theory for the loss of good jobs is deindustrialization, which caused the shuttering of factories and the hollowing out of communities that had sprung up around them. Such a passive word, “deindustrialization” — leaving the impression that it just happened somehow, as if the country got deindustrialization the way a forest gets infested by bark beetles. But economic forces framed as inexorable, like deindustrialization and the acceleration of global trade, are often helped along by policy decisions like the 1994 North American Free Trade Agreement, which made it easier for companies to move their factories to Mexico and contributed to the loss of hundreds of thousands of American jobs. The world has changed, but it has changed for other economies as well. Yet Belgium and Canada and many other countries haven’t experienced the kind of wage stagnation and surge in income inequality that the United States has.

Those countries managed to keep their unions. We didn’t. Throughout the 1950s and 1960s, nearly a third of all U.S. workers carried union cards. These were the days of the United Automobile Workers, led by Walter Reuther, once savagely beaten by Ford’s brass-knuckle boys, and of the mighty American Federation of Labor and Congress of Industrial Organizations that together represented around 15 million workers, more than the population of California at the time.

In their heyday, unions put up a fight. In 1970 alone, 2.4 million union members participated in work stoppages, wildcat strikes and tense standoffs with company heads. The labor movement fought for better pay and safer working conditions and supported antipoverty policies. Their efforts paid off for both unionized and nonunionized workers, as companies like Eastman Kodak were compelled to provide generous compensation and benefits to their workers to prevent them from organizing. By one estimate, the wages of nonunionized men without a college degree would be 8 percent higher today if union strength remained what it was in the late 1970s, a time when worker pay climbed, chief-executive compensation was reined in and the country experienced the most economically equitable period in modern history.

It is important to note that Old Labor was often a white man’s refuge. In the 1930s, many unions outwardly discriminated against Black workers or segregated them into Jim Crow local chapters. In the 1960s, unions like the Brotherhood of Railway and Steamship Clerks and the United Brotherhood of Carpenters and Joiners of America enforced segregation within their ranks. Unions harmed themselves through their self-defeating racism and were further weakened by a changing economy. But organized labor was also attacked by political adversaries. As unions flagged, business interests sensed an opportunity. Corporate lobbyists made deep inroads in both political parties, beginning a public-relations campaign that pressured policymakers to roll back worker protections.

A national litmus test arrived in 1981, when 13,000 unionized air traffic controllers left their posts after contract negotiations with the Federal Aviation Administration broke down. When the workers refused to return, Reagan fired all of them. The public’s response was muted, and corporate America learned that it could crush unions with minimal blowback. And so it went, in one industry after another.

Today almost all private-sector employees (94 percent) are without a union, though roughly half of nonunion workers say they would organize if given the chance. They rarely are. Employers have at their disposal an arsenal of tactics designed to prevent collective bargaining, from hiring union-busting firms to telling employees that they could lose their jobs if they vote yes. Those strategies are legal, but companies also make illegal moves to block unions, like disciplining workers for trying to organize or threatening to close facilities. In 2016 and 2017, the National Labor Relations Board charged 42 percent of employers with violating federal law during union campaigns. In nearly a third of cases, this involved illegally firing workers for organizing.

Corporate lobbyists told us that organized labor was a drag on the economy — that once the companies had cleared out all these fusty, lumbering unions, the economy would rev up, raising everyone’s fortunes. But that didn’t come to pass. The negative effects of unions have been wildly overstated, and there is now evidence that unions play a role in increasing company productivity, for example by reducing turnover. The U.S. Bureau of Labor Statistics measures productivity as how efficiently companies turn inputs (like materials and labor) into outputs (like goods and services). Historically, productivity, wages and profits rise and fall in lock step. But the American economy is less productive today than it was in the post-World War II period, when unions were at peak strength. The economies of other rich countries have slowed as well, including those with more highly unionized work forces, but it is clear that diluting labor power in America did not unleash economic growth or deliver prosperity to more people. “We were promised economic dynamism in exchange for inequality,” Eric Posner and Glen Weyl write in their book “Radical Markets.” “We got the inequality, but dynamism is actually declining.”

As workers lost power, their jobs got worse. For several decades after World War II, ordinary workers’ inflation-adjusted wages (known as “real wages”) increased by 2 percent each year. But since 1979, real wages have grown by only 0.3 percent a year. Astonishingly, workers with a high school diploma made 2.7 percent less in 2017 than they would have in 1979, adjusting for inflation. Workers without a diploma made nearly 10 percent less.

Lousy, underpaid work is not an indispensable, if regrettable, byproduct of capitalism, as some business defenders claim today. (This notion would have scandalized capitalism’s earliest defenders. John Stuart Mill, arch advocate of free people and free markets, once said that if widespread scarcity was a hallmark of capitalism, he would become a communist.) But capitalism is inherently about owners trying to give as little, and workers trying to get as much, as possible. With unions largely out of the picture, corporations have chipped away at the conventional midcentury work arrangement, which involved steady employment, opportunities for advancement and raises and decent pay with some benefits.

As the sociologist Gerald Davis has put it: Our grandparents had careers. Our parents had jobs. We complete tasks. Or at least that has been the story of the American working class and working poor.

Poor Americans aren’t just exploited in the labor market. They face consumer exploitation in the housing and financial markets as well.

There is a long history of slum exploitation in America. Money made slums because slums made money. Rent has more than doubled over the past two decades, rising much faster than renters’ incomes. Median rent rose from $483 in 2000 to $1,216 in 2021. Why have rents shot up so fast? Experts tend to offer the same rote answers to this question. There’s not enough housing supply, they say, and too much demand. Landlords must charge more just to earn a decent rate of return. Must they? How do we know?

We need more housing; no one can deny that. But rents have jumped even in cities with plenty of apartments to go around. At the end of 2021, almost 19 percent of rental units in Birmingham, Ala., sat vacant, as did 12 percent of those in Syracuse, N.Y. Yet rent in those areas increased by roughly 14 percent and 8 percent, respectively, over the previous two years. National data also show that rental revenues have far outpaced property owners’ expenses in recent years, especially for multifamily properties in poor neighborhoods. Rising rents are not simply a reflection of rising operating costs. There’s another dynamic at work, one that has to do with the fact that poor people — and particularly poor Black families — don’t have much choice when it comes to where they can live. Because of that, landlords can overcharge them, and they do.

A study I published with Nathan Wilmers found that after accounting for all costs, landlords operating in poor neighborhoods typically take in profits that are double those of landlords operating in affluent communities. If down-market landlords make more, it’s because their regular expenses (especially their mortgages and property-tax bills) are considerably lower than those in upscale neighborhoods. But in many cities with average or below-average housing costs — think Buffalo, not Boston — rents in the poorest neighborhoods are not drastically lower than rents in the middle-class sections of town. From 2015 to 2019, median monthly rent for a two-bedroom apartment in the Indianapolis metropolitan area was $991; it was $816 in neighborhoods with poverty rates above 40 percent, just around 17 percent less. Rents are lower in extremely poor neighborhoods, but not by as much as you would think.

Yet where else can poor families live? They are shut out of homeownership because banks are disinclined to issue small-dollar mortgages, and they are also shut out of public housing, which now has waiting lists that stretch on for years and even decades. Struggling families looking for a safe, affordable place to live in America usually have but one choice: to rent from private landlords and fork over at least half their income to rent and utilities. If millions of poor renters accept this state of affairs, it’s not because they can’t afford better alternatives; it’s because they often aren’t offered any.

You can read injunctions against usury in the Vedic texts of ancient India, in the sutras of Buddhism and in the Torah. Aristotle and Aquinas both rebuked it. Dante sent moneylenders to the seventh circle of hell. None of these efforts did much to stem the practice, but they do reveal that the unprincipled act of trapping the poor in a cycle of debt has existed at least as long as the written word. It might be the oldest form of exploitation after slavery. Many writers have depicted America’s poor as unseen, shadowed and forgotten people: as “other” or “invisible.” But markets have never failed to notice the poor, and this has been particularly true of the market for money itself.

The deregulation of the banking system in the 1980s heightened competition among banks. Many responded by raising fees and requiring customers to carry minimum balances. In 1977, over a third of banks offered accounts with no service charge. By the early 1990s, only 5 percent did. Big banks grew bigger as community banks shuttered, and in 2021, the largest banks in America charged customers almost $11 billion in overdraft fees. Previous research showed that just 9 percent of account holders paid 84 percent of these fees. Who were the unlucky 9 percent? Customers who carried an average balance of less than $350. The poor were made to pay for their poverty.

In 2021, the average fee for overdrawing your account was $33.58. Because banks often issue multiple charges a day, it’s not uncommon to overdraw your account by $20 and end up paying $200 for it. Banks could (and do) deny accounts to people who have a history of overextending their money, but those customers also provide a steady revenue stream for some of the most powerful financial institutions in the world.

Every year: almost $11 billion in overdraft fees, $1.6 billion in check-cashing fees and up to $8.2 billion in payday-loan fees.

According to the F.D.I.C., one in 19 U.S. households had no bank account in 2019, amounting to more than seven million families. Compared with white families, Black and Hispanic families were nearly five times as likely to lack a bank account. Where there is exclusion, there is exploitation. Unbanked Americans have created a market, and thousands of check-cashing outlets now serve that market. Check-cashing stores generally charge from 1 to 10 percent of the total, depending on the type of check. That means that a worker who is paid $10 an hour and takes a $1,000 check to a check-cashing outlet will pay $10 to $100 just to receive the money he has earned, effectively losing one to 10 hours of work. (For many, this is preferable to the less-predictable exploitation by traditional banks, with their automatic overdraft fees. It’s the devil you know.) In 2020, Americans spent $1.6 billion just to cash checks. If the poor had a costless way to access their own money, over a billion dollars would have remained in their pockets during the pandemic-induced recession.

Poverty can mean missed payments, which can ruin your credit. But just as troublesome as bad credit is having no credit score at all, which is the case for 26 million adults in the United States. Another 19 million possess a credit history too thin or outdated to be scored. Having no credit (or bad credit) can prevent you from securing an apartment, buying insurance and even landing a job, as employers are increasingly relying on credit checks during the hiring process. And when the inevitable happens — when you lose hours at work or when the car refuses to start — the payday-loan industry steps in.

For most of American history, regulators prohibited lending institutions from charging exorbitant interest on loans. Because of these limits, banks kept interest rates between 6 and 12 percent and didn’t do much business with the poor, who in a pinch took their valuables to the pawnbroker or the loan shark. But the deregulation of the banking sector in the 1980s ushered the money changers back into the temple by removing strict usury limits. Interest rates soon reached 300 percent, then 500 percent, then 700 percent. Suddenly, some people were very interested in starting businesses that lent to the poor. In recent years, 17 states have brought back strong usury limits, capping interest rates and effectively prohibiting payday lending. But the trade thrives in most places. The annual percentage rate for a two-week $300 loan can reach 460 percent in California, 516 percent in Wisconsin and 664 percent in Texas.

Roughly a third of all payday loans are now issued online, and almost half of borrowers who have taken out online loans have had lenders overdraw their bank accounts. The average borrower stays indebted for five months, paying $520 in fees to borrow $375. Keeping people indebted is, of course, the ideal outcome for the payday lender. It’s how they turn a $15 profit into a $150 one. Payday lenders do not charge high fees because lending to the poor is risky — even after multiple extensions, most borrowers pay up. Lenders extort because they can.

Every year: almost $11 billion in overdraft fees, $1.6 billion in check-cashing fees and up to $8.2 billion in payday-loan fees. That’s more than $55 million in fees collected predominantly from low-income Americans each day — not even counting the annual revenue collected by pawnshops and title loan services and rent-to-own schemes. When James Baldwin remarked in 1961 how “extremely expensive it is to be poor,” he couldn’t have imagined these receipts.

“Predatory inclusion” is what the historian Keeanga-Yamahtta Taylor calls it in her book “Race for Profit,” describing the longstanding American tradition of incorporating marginalized people into housing and financial schemes through bad deals when they are denied good ones. The exclusion of poor people from traditional banking and credit systems has forced them to find alternative ways to cash checks and secure loans, which has led to a normalization of their exploitation. This is all perfectly legal, after all, and subsidized by the nation’s richest commercial banks. The fringe banking sector would not exist without lines of credit extended by the conventional one. Wells Fargo and JPMorgan Chase bankroll payday lenders like Advance America and Cash America. Everybody gets a cut.

Poverty isn’t simply the condition of not having enough money. It’s the condition of not having enough choice and being taken advantage of because of that. When we ignore the role that exploitation plays in trapping people in poverty, we end up designing policy that is weak at best and ineffective at worst. For example, when legislation lifts incomes at the bottom without addressing the housing crisis, those gains are often realized instead by landlords, not wholly by the families the legislation was intended to help. A 2019 study conducted by the Federal Reserve Bank of Philadelphia found that when states raised minimum wages, families initially found it easier to pay rent. But landlords quickly responded to the wage bumps by increasing rents, which diluted the effect of the policy. This happened after the pandemic rescue packages, too: When wages began to rise in 2021 after worker shortages, rents rose as well, and soon people found themselves back where they started or worse.

Antipoverty programs work. Each year, millions of families are spared the indignities and hardships of severe deprivation because of these government investments. But our current antipoverty programs cannot abolish poverty by themselves. The Johnson administration started the War on Poverty and the Great Society in 1964. These initiatives constituted a bundle of domestic programs that included the Food Stamp Act, which made food aid permanent; the Economic Opportunity Act, which created Job Corps and Head Start; and the Social Security Amendments of 1965, which founded Medicare and Medicaid and expanded Social Security benefits. Nearly 200 pieces of legislation were signed into law in President Lyndon B. Johnson’s first five years in office, a breathtaking level of activity. And the result? Ten years after the first of these programs were rolled out in 1964, the share of Americans living in poverty was half what it was in 1960.

But the War on Poverty and the Great Society were started during a time when organized labor was strong, incomes were climbing, rents were modest and the fringe banking industry as we know it today didn’t exist. Today multiple forms of exploitation have turned antipoverty programs into something like dialysis, a treatment designed to make poverty less lethal, not to make it disappear.

This means we don’t just need deeper antipoverty investments. We need different ones, policies that refuse to partner with poverty, policies that threaten its very survival. We need to ensure that aid directed at poor people stays in their pockets, instead of being captured by companies whose low wages are subsidized by government benefits, or by landlords who raise the rents as their tenants’ wages rise, or by banks and payday-loan outlets who issue exorbitant fines and fees. Unless we confront the many forms of exploitation that poor families face, we risk increasing government spending only to experience another 50 years of sclerosis in the fight against poverty.

The best way to address labor exploitation is to empower workers. A renewed contract with American workers should make organizing easy. As things currently stand, unionizing a workplace is incredibly difficult. Under current labor law, workers who want to organize must do so one Amazon warehouse or one Starbucks location at a time. We have little chance of empowering the nation’s warehouse workers and baristas this way. This is why many new labor movements are trying to organize entire sectors. The Fight for $15 campaign, led by the Service Employees International Union, doesn’t focus on a single franchise (a specific McDonald’s store) or even a single company (McDonald’s) but brings together workers from several fast-food chains. It’s a new kind of labor power, and one that could be expanded: If enough workers in a specific economic sector — retail, hotel services, nursing — voted for the measure, the secretary of labor could establish a bargaining panel made up of representatives elected by the workers. The panel could negotiate with companies to secure the best terms for workers across the industry. This is a way to organize all Amazon warehouses and all Starbucks locations in a single go.

Sectoral bargaining, as it’s called, would affect tens of millions of Americans who have never benefited from a union of their own, just as it has improved the lives of workers in Europe and Latin America. The idea has been criticized by members of the business community, like the U.S. Chamber of Commerce, which has raised concerns about the inflexibility and even the constitutionality of sectoral bargaining, as well as by labor advocates, who fear that industrywide policies could nullify gains that existing unions have made or could be achieved only if workers make other sacrifices. Proponents of the idea counter that sectoral bargaining could even the playing field, not only between workers and bosses, but also between companies in the same sector that would no longer be locked into a race to the bottom, with an incentive to shortchange their work force to gain a competitive edge. Instead, the companies would be forced to compete over the quality of the goods and services they offer. Maybe we would finally reap the benefits of all that economic productivity we were promised.

We must also expand the housing options for low-income families. There isn’t a single right way to do this, but there is clearly a wrong way: the way we’re doing it now. One straightforward approach is to strengthen our commitment to the housing programs we already have. Public housing provides affordable homes to millions of Americans, but it’s drastically underfunded relative to the need. When the wealthy township of Cherry Hill, N.J., opened applications for 29 affordable apartments in 2021, 9,309 people applied. The sky-high demand should tell us something, though: that affordable housing is a life changer, and families are desperate for it.

We could also pave the way for more Americans to become homeowners, an initiative that could benefit poor, working-class and middle-class families alike — as well as scores of young people. Banks generally avoid issuing small-dollar mortgages, not because they’re riskier — these mortgages have the same delinquency rates as larger mortgages — but because they’re less profitable. Over the life of a mortgage, interest on $1 million brings in a lot more money than interest on $75,000. This is where the federal government could step in, providing extra financing to build on-ramps to first-time homeownership. In fact, it already does so in rural America through the 502 Direct Loan Program, which has moved more than two million families into their own homes. These loans, fully guaranteed and serviced by the Department of Agriculture, come with low interest rates and, for very poor families, cover the entire cost of the mortgage, nullifying the need for a down payment. Last year, the average 502 Direct Loan was for $222,300 but cost the government only $10,370 per loan, chump change for such a durable intervention. Expanding a program like this into urban communities would provide even more low- and moderate-income families with homes of their own.

We should also ensure fair access to capital. Banks should stop robbing the poor and near-poor of billions of dollars each year, immediately ending exorbitant overdraft fees. As the legal scholar Mehrsa Baradaran has pointed out, when someone overdraws an account, banks could simply freeze the transaction or could clear a check with insufficient funds, providing customers a kind of short-term loan with a low interest rate of, say, 1 percent a day.

States should rein in payday-lending institutions and insist that lenders make it clear to potential borrowers what a loan is ultimately likely to cost them. Just as fast-food restaurants must now publish calorie counts next to their burgers and shakes, payday-loan stores should publish the average overall cost of different loans. When Texas adopted disclosure rules, residents took out considerably fewer bad loans. If Texas can do this, why not California or Wisconsin? Yet to stop financial exploitation, we need to expand, not limit, low-income Americans’ access to credit. Some have suggested that the government get involved by having the U.S. Postal Service or the Federal Reserve issue small-dollar loans. Others have argued that we should revise government regulations to entice commercial banks to pitch in. Whatever our approach, solutions should offer low-income Americans more choice, a way to end their reliance on predatory lending institutions that can get away with robbery because they are the only option available.

In Tommy Orange’s novel, “There There,” a man trying to describe the problem of suicides on Native American reservations says: “Kids are jumping out the windows of burning buildings, falling to their deaths. And we think the problem is that they’re jumping.” The poverty debate has suffered from a similar kind of myopia. For the past half-century, we’ve approached the poverty question by pointing to poor people themselves — posing questions about their work ethic, say, or their welfare benefits — when we should have been focusing on the fire. The question that should serve as a looping incantation, the one we should ask every time we drive past a tent encampment, those tarped American slums smelling of asphalt and bodies, or every time we see someone asleep on the bus, slumped over in work clothes, is simply: Who benefits? Not: Why don’t you find a better job? Or: Why don’t you move? Or: Why don’t you stop taking out payday loans? But: Who is feeding off this?

Those who have amassed the most power and capital bear the most responsibility for America’s vast poverty: political elites who have utterly failed low-income Americans over the past half-century; corporate bosses who have spent and schemed to prioritize profits over families; lobbyists blocking the will of the American people with their self-serving interests; property owners who have exiled the poor from entire cities and fueled the affordable-housing crisis. Acknowledging this is both crucial and deliciously absolving; it directs our attention upward and distracts us from all the ways (many unintentional) that we — we the secure, the insured, the housed, the college-educated, the protected, the lucky — also contribute to the problem.

Corporations benefit from worker exploitation, sure, but so do consumers, who buy the cheap goods and services the working poor produce, and so do those of us directly or indirectly invested in the stock market. Landlords are not the only ones who benefit from housing exploitation; many homeowners do, too, their property values propped up by the collective effort to make housing scarce and expensive. The banking and payday-lending industries profit from the financial exploitation of the poor, but so do those of us with free checking accounts, as those accounts are subsidized by billions of dollars in overdraft fees.

Living our daily lives in ways that express solidarity with the poor could mean we pay more; anti-exploitative investing could dampen our stock portfolios. By acknowledging those costs, we acknowledge our complicity. Unwinding ourselves from our neighbors’ deprivation and refusing to live as enemies of the poor will require us to pay a price. It’s the price of our restored humanity and renewed country.

Matthew Desmond is a professor of sociology at Princeton University and a contributing writer for the magazine. His latest book, “Poverty, by America,” from which this article is adapted, is being published on March 21 by Crown.

An earlier version of this article referred incorrectly to the legal protections for undocumented workers. They are afforded rights under U.S. labor laws, though in practice those laws often fail to protect them.

An earlier version of this article implied an incorrect date for a statistic about overdraft fees. The research was conducted between 2005 and 2012, not in 2021.

How we handle corrections


Poverty Research Proposal

Introduction, poverty: statement of the problem, significance of the study, relevant literature review, methodology.

For a long time, poverty has been perceived to constitute lack or inadequacy of basic needs, including food, clothing, and shelter. The levels by which different societies achieve these three basic essentials vary, and this explains the differences in poverty levels among different societies. Today, America is described to have the highest level of poverty rate compared to other industrialized countries (Garcia, 2011).

To justify this, the recent and most current statistics from the Census Bureau shows that the level and rate of poverty in USA is increasing, with minority ethnic groups being the most disadvantaged (Dye, 2010).

In the past, numerous poverty reduction policies have been formulated and implemented, but their overall impact remains below expectations, as the main beneficiaries are the middle class in expense of the poor (Dye, 2010). Therefore, the situation calls for paradigm shift in policy formulation and implementation.

In the year 2010, poverty rate in USA stood at 15.1% up from 14.3% recorded in the previous year-2009 (USA Census Bureau, 2011). At the same time, it was noted that poverty rate for the last four years has been increasing at an estimated rate of 2.6%.

On overall, in 2010, estimates indicated that about 46.2 million Americans are poor and the rate of poverty increased was observed to affect almost all major ethnic groups in America: Whites, African American, Asians, Hispanic (USA Census Bureau, 2011).

Furthermore, the 2010 official statistics indicated the highest rate of poverty the country had experienced and recorded since 1993. Therefore, in order to address this issue of increasing poverty, there is need to conduct an action research that investigates public policy initiatives in USA with regard to poverty, and subsequently propose the most effective public policy that can be pursued successfully.

Poverty remains an issue that ought to be addressed in the American society as a way of achieving the American Dream. Social inclusion goals and objectives postulate that, the well-being of humankind is the essence of stability, peace, and societal development.

Therefore, addressing poverty is one way of achieving social inclusion goals. At the same time, there is need for an effective public policy that comprehensively addresses the issues of poverty in the country. Therefore, this study possesses the ability to create a sound body of knowledge that in turn can be used to create an effective public policy framework.

Poverty level in USA is increasing at gradual rate, and the overall impact of this to the society is huge (Garcia, 2011). Addressing poverty has assumed and utilized unilateral public policy models that in turn have led to inadequacy in tackling the issue of poverty.

For instance, many of the convectional poverty policies address education, employment, social security, health, economic growth, and tax (Anonymous, 2006). This has been done in separateness and the result has been construction, formulation, and implementation of skewed and weak poverty reduction models.

There is need to establish broad-based understanding of poverty and know that it interplays with other factors and elements simultaneously, hence any attempt to address poverty requires addressing the interplay of accompanying factors.

According to Corak (2005), in order to fight poverty, social and physical infrastructure and services can be funded and maintained effectively if the target groups are involved in designing, implementing, and monitoring them, as well as in ensuring accountability of the government officials responsible for such policies.

Primary and secondary research methods will be utilized, where primary data will be generated through actual field research techniques, while secondary data will be generated from works already done in the field. Furthermore, reliability and validity of information will be enhanced through use of both quantitative and qualitative techniques.

This will see the use of questionnaires, field interviews, poverty program surveys, and in-depth discussion. The aim of this will be to ensure that the public policy to be designed captures the aspect and essence of poverty and subsequent reduction strategies in broad perspective.

Poverty remains a social issue that requires clear strategies of addressing it. Efforts in the past have bore fruits, but given recent trends of increasing cases of poverty in the society, there is an urgent need to address poverty comprehensively. It is from this fact that it is recommended that addressing poverty in modern America require an action plan originating from an inclusive and integrated social equity policy strategy.

Anonymous. (2006). How can we solve the problem of poverty . Web.

Corak, M (2005). Equality of Opportunity and Inequality across the Generations: Challenges Ahead. Policy Options , 26(3), 78–83.

Dye, T.R. (2010). Understanding public policy (13th ed.). Longman: Pearson Prentice Hall.

Garcia, G. (2011). Mexican American and Immigrant Poverty in the United States . NY: Springer.

USA Census Bureau . (2011). ‘Poverty Highlights . USA Federal Press. Web.

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IvyPanda . "Poverty Research Proposal." October 31, 2023. https://ivypanda.com/essays/poverty-research-proposal/.

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  • How to Write a Problem Statement | Guide & Examples

How to Write a Problem Statement | Guide & Examples

Published on November 6, 2022 by Shona McCombes and Tegan George. Revised on November 20, 2023.

A problem statement is a concise and concrete summary of the research problem you seek to address. It should:

  • Contextualize the problem. What do we already know?
  • Describe the exact issue your research will address. What do we still need to know?
  • Show the relevance of the problem. Why do we need to know more about this?
  • Set the objectives of the research. What will you do to find out more?

Table of contents

When should you write a problem statement, step 1: contextualize the problem, step 2: show why it matters, step 3: set your aims and objectives.

Problem statement example

Other interesting articles

Frequently asked questions about problem statements.

There are various situations in which you might have to write a problem statement.

In the business world, writing a problem statement is often the first step in kicking off an improvement project. In this case, the problem statement is usually a stand-alone document.

In academic research, writing a problem statement can help you contextualize and understand the significance of your research problem. It is often several paragraphs long, and serves as the basis for your research proposal . Alternatively, it can be condensed into just a few sentences in your introduction .

A problem statement looks different depending on whether you’re dealing with a practical, real-world problem or a theoretical issue. Regardless, all problem statements follow a similar process.

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The problem statement should frame your research problem, giving some background on what is already known.

Practical research problems

For practical research, focus on the concrete details of the situation:

  • Where and when does the problem arise?
  • Who does the problem affect?
  • What attempts have been made to solve the problem?

Theoretical research problems

For theoretical research, think about the scientific, social, geographical and/or historical background:

  • What is already known about the problem?
  • Is the problem limited to a certain time period or geographical area?
  • How has the problem been defined and debated in the scholarly literature?

The problem statement should also address the relevance of the research. Why is it important that the problem is addressed?

Don’t worry, this doesn’t mean you have to do something groundbreaking or world-changing. It’s more important that the problem is researchable, feasible, and clearly addresses a relevant issue in your field.

Practical research is directly relevant to a specific problem that affects an organization, institution, social group, or society more broadly. To make it clear why your research problem matters, you can ask yourself:

  • What will happen if the problem is not solved?
  • Who will feel the consequences?
  • Does the problem have wider relevance? Are similar issues found in other contexts?

Sometimes theoretical issues have clear practical consequences, but sometimes their relevance is less immediately obvious. To identify why the problem matters, ask:

  • How will resolving the problem advance understanding of the topic?
  • What benefits will it have for future research?
  • Does the problem have direct or indirect consequences for society?

Finally, the problem statement should frame how you intend to address the problem. Your goal here should not be to find a conclusive solution, but rather to propose more effective approaches to tackling or understanding it.

The research aim is the overall purpose of your research. It is generally written in the infinitive form:

  • The aim of this study is to determine …
  • This project aims to explore …
  • This research aims to investigate …

The research objectives are the concrete steps you will take to achieve the aim:

  • Qualitative methods will be used to identify …
  • This work will use surveys to collect …
  • Using statistical analysis, the research will measure …

The aims and objectives should lead directly to your research questions.

Learn how to formulate research questions

You can use these steps to write your own problem statement, like the example below.

Step 1: Contextualize the problem A family-owned shoe manufacturer has been in business in New England for several generations, employing thousands of local workers in a variety of roles, from assembly to supply-chain to customer service and retail. Employee tenure in the past always had an upward trend, with the average employee staying at the company for 10+ years. However, in the past decade, the trend has reversed, with some employees lasting only a few months, and others leaving abruptly after many years.

Step 2: Show why it matters As the perceived loyalty of their employees has long been a source of pride for the company, they employed an outside consultant firm to see why there was so much turnover. The firm focused on the new hires, concluding that a rival shoe company located in the next town offered higher hourly wages and better “perks”, such as pizza parties. They claimed this was what was leading employees to switch. However, to gain a fuller understanding of why the turnover persists even after the consultant study, in-depth qualitative research focused on long-term employees is also needed. Focusing on why established workers leave can help develop a more telling reason why turnover is so high, rather than just due to salaries. It can also potentially identify points of change or conflict in the company’s culture that may cause workers to leave.

Step 3: Set your aims and objectives This project aims to better understand why established workers choose to leave the company. Qualitative methods such as surveys and interviews will be conducted comparing the views of those who have worked 10+ years at the company and chose to stay, compared with those who chose to leave.

If you want to know more about the research process , methodology , research bias , or statistics , make sure to check out some of our other articles with explanations and examples.


  • Sampling methods
  • Simple random sampling
  • Stratified sampling
  • Cluster sampling
  • Likert scales
  • Reproducibility


  • Null hypothesis
  • Statistical power
  • Probability distribution
  • Effect size
  • Poisson distribution

Research bias

  • Optimism bias
  • Cognitive bias
  • Implicit bias
  • Hawthorne effect
  • Anchoring bias
  • Explicit bias

Once you’ve decided on your research objectives , you need to explain them in your paper, at the end of your problem statement .

Keep your research objectives clear and concise, and use appropriate verbs to accurately convey the work that you will carry out for each one.

I will compare …

All research questions should be:

  • Focused on a single problem or issue
  • Researchable using primary and/or secondary sources
  • Feasible to answer within the timeframe and practical constraints
  • Specific enough to answer thoroughly
  • Complex enough to develop the answer over the space of a paper or thesis
  • Relevant to your field of study and/or society more broadly

Writing Strong Research Questions

Research objectives describe what you intend your research project to accomplish.

They summarize the approach and purpose of the project and help to focus your research.

Your objectives should appear in the introduction of your research paper , at the end of your problem statement .

Your research objectives indicate how you’ll try to address your research problem and should be specific:

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The World Bank

The World Bank Group is committed to fighting poverty in all its dimensions. We use the latest data, evidence and analysis to help countries develop policies to improve people's lives, with a focus on the poorest and most vulnerable.

About 700 million people live on less than $2.15 per day, the extreme poverty line. Extreme poverty remains concentrated in parts of Sub-Saharan Africa, fragile and conflict-affected areas, and rural areas.

After decades of progress, the pace of global poverty reduction began to slow by 2015, in tandem with subdued economic growth. The Sustainable Development Goal of ending extreme poverty by 2030 remains out of reach: an estimated 600 million people will live on less than $2.15 per day in 2030.

Global poverty reduction was severely impacted by the COVID pandemic and a series of major shocks during 2020-22, causing three years of lost progress.

The extreme poverty rate is now back to pre-pandemic levels globally – but not for low-income countries, which were most impacted and have yet to recover.

Poverty remains a challenge also for many middle-income countries. Despite the share of the poor population falling below pre-pandemic levels, there has been an increase in the total number of people living on less than $6.85 per day, the poverty line for upper-middle income countries, due to population growth.

We cannot reduce poverty and inequality without also addressing intertwined global challenges, including slow economic growth, fragility and conflict, and climate change.

Climate change is hindering poverty reduction and is a major threat going forward. The lives and livelihoods of poor people are the most vulnerable to climate-related risks. Millions of households are pushed into, or trapped in, poverty by natural disasters every year. Higher temperatures are already reducing productivity in Africa and Latin America, and will further depress economic growth, especially in the world’s poorest regions.

Eradicating poverty requires tackling its many dimensions. Countries cannot adequately address poverty without also improving people’s well-being in a comprehensive way, including through more equitable access to health, education, and basic infrastructure and services, including digital.

Policymakers must intensify efforts to grow their economies in a way that creates high quality jobs and employment, while protecting the most vulnerable. Quality jobs and employment are the surest way to reduce poverty and inequality. Impact is further multiplied in communities and across generations by empowering women and girls, and young people.

Last Updated: Mar 19, 2024

Strategies to reach the least well-off must be tailored to each country’s context, considering the latest data and analysis, and the needs of the population. How the world responds to major challenges today will have a direct bearing on whether the current reversals in global poverty reduction can be turned around.

The World Bank provides recommendations for a complementary two-track approach: responding effectively to the urgent crisis in the short run, while continuing to focus on foundational development problems, including conflict and climate change.

Closing the gaps between policy aspiration and attainment

Too often, there is a wide gap between policies as articulated and their attainment in practice—between what citizens rightfully expect, and what they experience daily. Policy aspirations can be laudable, but there is likely to be considerable variation in the extent to which they can be realized, and in which groups benefit from them. For example, at the local level, those who have the least influence in a community might not be able to access basic services. It is critical to forge implementation strategies that can rapidly and flexibly respond to close the gaps.

Enhancing learning, improving data

From information gathered in household surveys to pixels captured by satellite images, data can inform policies and spur economic activity, serving as a powerful weapon in the fight against poverty. More data is available today than ever before, yet its value is largely untapped. Data is also a double-edged sword, requiring a social contract that builds trust by protecting people against misuse and harm, and works toward equal access and representation.

Investing in preparedness and prevention

The COVID-19 pandemic demonstrated that years of progress in reducing poverty can quickly disappear when a crisis strikes. Prevention measures often have low political payoff, with little credit given for disasters averted. Over time, populations with no lived experience of calamity can become complacent, presuming that such risks have been eliminated or can readily be addressed if they happen. COVID-19, together with climate change and enduring conflicts, reminds us of the importance of investing in preparedness and prevention measures comprehensively and proactively.

Expanding cooperation and coordination

Contributing to and maintaining public goods require extensive cooperation and coordination. This is crucial for promoting widespread learning and improving the data-driven foundations of policymaking. It is also important for forming a sense of shared solidarity during crises and ensuring that the difficult policy choices by officials are both trusted and trustworthy.

Overall, with more than 60 percent of the world’s extreme poor living in middle-income countries, we cannot focus solely on low-income countries if we want to end extreme poverty. We need to focus on the poorest people, regardless of where they live, and work with countries at all income levels to invest in their well-being and their future.

The goal to end extreme poverty works hand in hand with the World Bank Group’s goal to promote shared prosperity, focused on increasing income growth among the bottom 40 percent in every country. Boosting shared prosperity broadly translates into improving the welfare of the least well-off in each country and includes a strong emphasis on tackling persistent inequalities that keep people in poverty from generation to generation.

Our work at the World Bank Group is based on strong country-led programs to improve living conditions—to drive growth, raise median incomes, create jobs, fully incorporate women and young people into economies, address environmental and climate challenges, and support stronger, more stable economies for everyone.

We continue to work closely with countries to help them find the best ways to improve the lives of their least advantaged citizens.

Last Updated: Oct 17, 2023

The World Bank Group works to end poverty in several ways:

  • Funding projects that can have transformational impacts on communities.
  • Collecting and analyzing the critical data and evidence needed to target these programs to reach the poorest and most vulnerable.
  • Helping governments create more inclusive, effective policies that can benefit entire populations and lay the groundwork for prosperity for future generations. 

Some examples:

  • Cambodia has achieved remarkable progress in reducing poverty and boosting shared prosperity, but  key reforms  are needed to sustain pro-poor growth. The World Bank is supporting Cambodia to help address the country’s challenges of limited economic diversification, rapidly increasing urbanization, human capital deficiencies, and infrastructure gaps.
  • Mexico has experienced high income inequality and concentration of poverty in a few states. The World Bank Group  has supported Mexico’s efforts  to develop a more inclusive, effective, and integrated social protection system including relaunching a conditional cash transfer program to help improve access to higher education and formal employment.
  • In one of India’s poorest states, Bihar, a  program financed by the World Bank  has transformed livelihoods by mobilizing almost 10 million rural women into self-help groups and granting them access to finance and markets to start and expand their businesses.
  • A  pilot program in Ecuador  used text messages to relay information and encouragement to caregivers in an impoverished region of the country and saw a significant improvement in the nutrition and health of children.
  • Since 2007, a team of experts from the World Bank has been helping Kenya  strengthen statistical capacity  by reshaping its National Bureau of Statistics. With World Bank’s support, the bureau implemented a range of surveys to update key indicators of official statistics and improved the data ecosystem. The project is funded by $50 million from the World Bank’s  International Development Association  (IDA).
  • In-depth maps in countries such as  Afghanistan ,  Bangladesh ,  Croatia ,  Republic of Serbia , and Vietnam show where economic diversity and gaps in services exist within a country. This, as part of the poverty assessment process, helps policymakers better target policies and programs to reach and benefit the poor.
  • Yemen’s high  malnutrition rates have  drawn global attention, highlighting the impact the country’s five-and-half-year civil war has had on its population. The  Emergency Crisis Response Project  gives pregnant women and women with children under the age of five money to buy food and teaches them about child nutrition. It has been able to reach more than 165,000 pregnant or lactating women and 175,000 children so far.
  • Conflict-affected communities in Mindanao are among the poorest in the Philippines, suffering from poor infrastructure and lack of basic services. The World Bank along with other partners have aimed to enhance access to services and economic opportunities and build social cohesion. These  projects  have help build water systems, community centers, sanitation facilities, access roads, post-harvest facilities, and farming and fishing equipment, benefiting 650,000 people in 284 villages in a decade.
  • An innovative series of rapid  survey methodologies  were pioneered in Somalia, one of the poorest countries in Sub-Saharan Africa. The surveys overcame significant security and implementation obstacles to yield the most comprehensive analysis of the welfare of the Somali people in decades and is now being used in other countries. 

Last Updated: Nov 30, 2022

How the Pandemic Drove Increases in Poverty | Poverty & Shared Prosperity 2022

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World Bank Blogs

March 2023 global poverty update from the World Bank: the challenge of estimating poverty in the pandemic

Samuel kofi tetteh baah, r. andres castaneda aguilar, carolina diaz-bonilla, christoph lakner, minh cong nguyen, martha viveros.

Global poverty estimates were updated today on the  Poverty and Inequality Platform (PIP) . This update includes new regional poverty aggregates in 2020 and 2021 for Latin America and the Caribbean, and in 2020 for Europe and Central Asia, and the group of advanced countries. These are the regions for which we now have sufficient survey data available during the COVID-19 pandemic. In total, 113 new country-years have been added, bringing the total number of surveys to more than 2,100.

This update also incorporates the usual changes to the input data, including revisions to existing welfare distributions, the inclusion of new welfare distributions, and revisions to price, national accounts, and population data used for global poverty monitoring (more details  here ). Overall, these changes have resulted in minor revisions in global and regional poverty estimates.

Table 1 summarizes the revisions to the regional and global poverty estimates between the September 2022 data vintage and the March 2023 data vintage for the 2019 reference year at all three poverty lines. The global poverty headcount ratio at $2.15 is revised slightly up by 0.1 percentage points to 8.5 percent, resulting in a revision in the number of poor people from 648 to 659 million. This revision represents 11 million more people living in extreme poverty, largely driven by South Asia (5 million) and the Middle East and North Africa (4 million).

Table 1 Poverty estimates for reference year 2019, changes between September 2022 and March 2023 vintage by region and poverty lines

Table 1. Poverty estimates for reference year 2019, changes between September 2022 and March 2023 vintage by region and poverty lines

Similar limited changes in poverty estimates are observed at the higher lines of $3.65 and $6.85, which are typically used for measuring poverty in lower-middle- and upper-middle-income countries, respectively. At $3.65, the global poverty headcount ratio increases by 0.1 percentage points to 23.6 percent, representing 28 million more people living in poverty. At $6.85, the global poverty rate increases by 0.2 percentage points to 46.9 percent, representing 44 million people living in poverty. The upward revisions in poverty estimates at the higher lines are largely driven by South Asia and Sub-Saharan Africa. 

This March 2023 global poverty update from the World Bank revises the previously published global and regional estimates from 1981 to 2019. Regional poverty estimates are now reported up to 2021, depending on sufficient data coverage over the period of the COVID-19 pandemic. Poverty data are reported for Europe and Central Asia until 2020, and Latin America and the Caribbean until 2021. For all other developing regions, poverty data are reported for pre-pandemic years (see Figure 1). More details are available  here on how we have determined those regions for which to report post-2019 estimates.

Figure 1: Global and regional poverty estimates, 1990 - 2021

The data published in this PIP update, while incorporating more recent input data, do not change the overall perceptions about global poverty trends and the regional distribution of poverty. It is still the case that global poverty has been falling since the 1990s, and at a slower rate since 2014 ( World Bank 2022 ). Extreme poverty has been falling in all regions, except the Middle East and North Africa due to conflict and fragility ( World Bank 2020 ). Roughly 60% of the world’s extreme poor in 2019 lived in Sub-Saharan Africa alone, while 81% of the global poor at the poverty line of $3.65 lived in Sub-Saharan Africa or South Asia. 

The authors gratefully acknowledge financial support from the UK Government through the Data and Evidence for Tackling Extreme Poverty (DEEP) Research Program.

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State of the Union fact check: What President Joe Biden got wrong (and right)

Though President Joe Biden largely stuck to the facts during his third State of the Union address Thursday, on several occasions he overstated the truth, left out key context or was simply wrong.

In a wide-ranging speech on issues including inflation, border security and conflicts in Ukraine and Gaza, Biden on multiple occasions attacked – but never identified by name – his Republican opponent in November, former President Donald Trump. But in contrasting himself with his challenger and making his case for a second term, Biden occasionally strayed from the truth.

For example, in addressing the economy, a crucial campaign issue, he touted the inflation rate in the U.S. as “the lowest in the world” – even though dozens of countries, including G7 nations Canada and France, have rates that are lower.

Here are the other claims the USA TODAY Fact Check Team dug into.

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Claim: Trump told Putin ‘Do whatever the hell you want’

“Now my predecessor, a former Republican president, tells Putin, quote, ‘Do whatever the hell you want.’ That’s a quote. A former president actually said that, bowing down to a Russian leader.”

Biden mischaracterized Trump’s remarks, which weren’t nearly as broad as this framing implies.

Speaking at a campaign rally in Conway, South Carolina, on Feb. 10, Trump suggested he might not come to the aid of NATO member states attacked by Russia if they weren't contributing enough money to the alliance, USA TODAY reported.

“One of the presidents of a big country stood up and said, ‘Well sir, if we don’t pay and we’re attacked by Russia, will you protect us?’" Trump said, according to the article. “I said, ‘You didn’t pay? You’re delinquent?’ He said, ‘Yes, let’s say that happened.’ No, I would not protect you.”

Trump added, “In fact, I would encourage them to do whatever the hell they want.”

– Andre Byik

Prior fact checks:

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Claim: Gross domestic product is up since Biden took office

 “Since I’ve come to office, our GDP is up.”

Biden is correct that GDP has grown since he came to office in January 2021, but this is hardly a unique achievement. Every president since Harry Truman has experienced GDP growth from the beginning to the end of their presidency, according to data from the U.S. Federal Reserve .  

Herbert Hoover, who was president from 1929 to 1933 during the Great Depression, was the last president who saw GDP drop during his presidency, according to The Balance . 

GDP grew by about 22% from January 2021 to December 2023.

– Brad Sylvester

Fact check roundup : Gas tax, border and Social Security: These 2024 presidential candidate claims are misleading

Claim: US inflation rate is the lowest in the world

“Inflation has dropped from 9% to 3% – the lowest in the world!”

Biden is simply wrong here.

The inflation rate refers to the annual percent change in consumer prices compared with the previous year's prices. That number was 3.1% in the U.S. for the year ending in January 2024, a reduction from 3.4% the previous January, according to the Bureau of Labor Statistics . 

But that’s not the lowest in the world.

The latest data from the International Monetary Fund shows the U.S. has a higher inflation rate than dozens of countries. Those with lower rates include G7 countries such as Canada and France (2.4% and 2.5% respectively) and other advanced economies such as New Zealand, Italy, Switzerland, Finland and China. The global average inflation rate is 5.8%, according to the IMF.

The U.S. inflation rate hit a four-decade peak of 9.1% in June 2022, the highest rate since 1981.

Claim: Biden administration cut the federal deficit by more than $1 trillion

"I’ve already cut the federal deficit by over $1 trillion. "

Biden is correct that the federal deficit has gone down by more than $1 trillion during his time in office. But his description fails to acknowledge the decline is primarily a result of the unique post-pandemic landscape. 

The drop was largely a result of "shrinking or expiring COVID relief," according to the Committee for a Responsible Federal Budget , a nonpartisan group that promotes fiscal responsibility.

The deficit stood at about $3.1 trillion in 2020 and $2.8 trillion in 2021 , then fell to $1.4 trillion in 2022 before slightly increasing to $1.7 trillion in 2023 , according to the Congressional Budget Office. 

That’s still well above where it was before the pandemic. In 2019 the deficit was $984 billion .

– Chris Mueller

  • Fact check : Social Security does contribute to federal deficit and national debt
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Claim: Trump said to ‘get over’ school shooting

“After another school shooting in Iowa, he said we should just get over it.”

Trump did use this phrase in remarks on Jan. 5 , but not as abruptly as Biden’s citation implies.

Speaking a day after a sixth grader was killed and five people were injured in a shooting at a high school in Perry, Iowa, Trump offered the victims and their families “our support and our deepest sympathies” and asked for comfort “for the whole state.”

Then came the comment Biden referenced:

“We’re really with you as much as anybody can be,” Trump said. “It’s a very terrible thing that happened, and it’s just horrible to see that happening. That’s just horrible. So surprising to see it here, but have to get over it. We have to move forward.”

Trump then resumed his condolences, saying, “But to the relatives and to all of the people that are so devastated right now, to a point they can’t breathe, they can’t live, we are with you and we love you and cherish you.”

– Joedy McCreary

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Claim: Pandemic tax credit caused cut child poverty in half

“The Child Tax Credit I passed during the pandemic … cut child poverty in half”

This is accurate, but it's only half the story.

The child poverty rate fell from 12.6% in 2019 to  9.7% in 2020 to 5.2% in 2021 – the latter drop being its largest on record, according to the Institute on Taxation and Economic Policy , a nonpartisan think tank. The organization attributes the change to the Biden-endorsed expansion of the Child Tax Credit in 2021.

But that measure ran out in 2022, after which the child poverty rate shot back up, to a three-year high of 12.4%. That rise was “due almost entirely to the expiration of the CTC enhancements” along with other components of Biden’s COVID-19 response package, ITEP concluded.

In his speech, Biden called for restoring the Child Tax Credit.

Claim: US-China trade deficit lowest in more than a decade

"Our trade deficit with China is down to the lowest point in over a decade."

In 2023, the U.S. trade deficit with China declined by more than $100 billion to $279.4 billion , the smallest total since 2010 , Bloomberg reported. A trade deficit occurs when the value of a country's imports exceeds the value of its exports.

But Biden is taking credit for a trend that also has ties to his predecessor and 2024 opponent, Trump. Chinese imports have faced higher tariffs since Trump imposed them in 2018 .

The Biden administration has kept most of the Trump administration tariffs in place, according to the Tax Foundation . Biden's administration has taken additional steps to reduce China's role in U.S. supply chains and sought to increase trade with strategic allies, according to Bloomberg .

Claim: Alabama court 'shut down' IVF treatments

"The Alabama Supreme Court shut down IVF treatments across the state."

In late February, Alabama's largest hospital paused in vitro fertilization after the state's Supreme Court ruled embryos created during the treatment should be legally treated as children.

In vitro fertilzation, or IVF, refers to a medical procedure that combines eggs and sperm in a lab dish before transferring the fertilized eggs into the uterus, according to Yale Medicine .

But Biden, who had called the ruling by Alabama's high court "outrageous and unacceptable," didn’t quite tell the whole story. He failed to mention that state lawmakers this week gave final approval to legislation protecting in vitro fertilization providers and patients.

Claim: Prescription drugs cost 40% more in the U.S. than in other nations

“I’m going to get in trouble for saying that, but anyone who wants to get in Air Force One with me and fly to Toronto, Berlin, Moscow – I mean, excuse me, well, even Moscow, probably – and bring your prescription with you and I promise you I’ll get it for you for 40% the cost you’re paying now.”

Biden is mostly right here.

A 2024 report from Rand , a global policy think tank, found prescription drug prices in the U.S. average 2.78 times those seen in 33 other nations. The report uses data through 2022.

“Put another way, prices in other countries were 36 percent – or a little more than one-third – of those in the United States,” Rand reported.

Prices for unbranded generic drugs, which account for 90% of prescription volume in the U.S., are about 67% of the average cost in the comparison nations, according to a Rand news release about the study. That means the U.S. pays less in this category.

“These findings provide further evidence that manufacturers’ gross prices for prescription drugs are higher in the United States than in comparison countries,” said Andrew Mulcahy , a senior health economist at Rand, in the news release. “We find that the gap is widening for name-brand drugs, while U.S. prices for generic drugs are now proportionally lower than our earlier analysis found.”

  • Fact check : Experts say US doesn't use 87% of global prescriptions
  • Fact check: Post falsely links antidepressant use to school shootings

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What to know about the crisis of violence, politics and hunger engulfing Haiti

A woman carrying two bags of rice walks past burning tires

A long-simmering crisis over Haiti’s ability to govern itself, particularly after a series of natural disasters and an increasingly dire humanitarian emergency, has come to a head in the Caribbean nation, as its de facto president remains stranded in Puerto Rico and its people starve and live in fear of rampant violence. 

The chaos engulfing the country has been bubbling for more than a year, only for it to spill over on the global stage on Monday night, as Haiti’s unpopular prime minister, Ariel Henry, agreed to resign once a transitional government is brokered by other Caribbean nations and parties, including the U.S.

But the very idea of a transitional government brokered not by Haitians but by outsiders is one of the main reasons Haiti, a nation of 11 million, is on the brink, according to humanitarian workers and residents who have called for Haitian-led solutions. 

“What we’re seeing in Haiti has been building since the 2010 earthquake,” said Greg Beckett, an associate professor of anthropology at Western University in Canada. 

Haitians take shelter in the Delmas 4 Olympic Boxing Arena

What is happening in Haiti and why?

In the power vacuum that followed the assassination of democratically elected President Jovenel Moïse in 2021, Henry, who was prime minister under Moïse, assumed power, with the support of several nations, including the U.S. 

When Haiti failed to hold elections multiple times — Henry said it was due to logistical problems or violence — protests rang out against him. By the time Henry announced last year that elections would be postponed again, to 2025, armed groups that were already active in Port-au-Prince, the capital, dialed up the violence.

Even before Moïse’s assassination, these militias and armed groups existed alongside politicians who used them to do their bidding, including everything from intimidating the opposition to collecting votes . With the dwindling of the country’s elected officials, though, many of these rebel forces have engaged in excessively violent acts, and have taken control of at least 80% of the capital, according to a United Nations estimate. 

Those groups, which include paramilitary and former police officers who pose as community leaders, have been responsible for the increase in killings, kidnappings and rapes since Moïse’s death, according to the Uppsala Conflict Data Program at Uppsala University in Sweden. According to a report from the U.N . released in January, more than 8,400 people were killed, injured or kidnapped in 2023, an increase of 122% increase from 2022.

“January and February have been the most violent months in the recent crisis, with thousands of people killed, or injured, or raped,” Beckett said.

Image: Ariel Henry

Armed groups who had been calling for Henry’s resignation have already attacked airports, police stations, sea ports, the Central Bank and the country’s national soccer stadium. The situation reached critical mass earlier this month when the country’s two main prisons were raided , leading to the escape of about 4,000 prisoners. The beleaguered government called a 72-hour state of emergency, including a night-time curfew — but its authority had evaporated by then.

Aside from human-made catastrophes, Haiti still has not fully recovered from the devastating earthquake in 2010 that killed about 220,000 people and left 1.5 million homeless, many of them living in poorly built and exposed housing. More earthquakes, hurricanes and floods have followed, exacerbating efforts to rebuild infrastructure and a sense of national unity.

Since the earthquake, “there have been groups in Haiti trying to control that reconstruction process and the funding, the billions of dollars coming into the country to rebuild it,” said Beckett, who specializes in the Caribbean, particularly Haiti. 

Beckett said that control initially came from politicians and subsequently from armed groups supported by those politicians. Political “parties that controlled the government used the government for corruption to steal that money. We’re seeing the fallout from that.”

Haiti Experiences Surge Of Gang Violence

Many armed groups have formed in recent years claiming to be community groups carrying out essential work in underprivileged neighborhoods, but they have instead been accused of violence, even murder . One of the two main groups, G-9, is led by a former elite police officer, Jimmy Chérizier — also known as “Barbecue” — who has become the public face of the unrest and claimed credit for various attacks on public institutions. He has openly called for Henry to step down and called his campaign an “armed revolution.”

But caught in the crossfire are the residents of Haiti. In just one week, 15,000 people have been displaced from Port-au-Prince, according to a U.N. estimate. But people have been trying to flee the capital for well over a year, with one woman telling NBC News that she is currently hiding in a church with her three children and another family with eight children. The U.N. said about 160,000 people have left Port-au-Prince because of the swell of violence in the last several months. 

Deep poverty and famine are also a serious danger. Gangs have cut off access to the country’s largest port, Autorité Portuaire Nationale, and food could soon become scarce.

Haiti's uncertain future

A new transitional government may dismay the Haitians and their supporters who call for Haitian-led solutions to the crisis. 

But the creation of such a government would come after years of democratic disruption and the crumbling of Haiti’s political leadership. The country hasn’t held an election in eight years. 

Haitian advocates and scholars like Jemima Pierre, a professor at the University of British Columbia, Vancouver, say foreign intervention, including from the U.S., is partially to blame for Haiti’s turmoil. The U.S. has routinely sent thousands of troops to Haiti , intervened in its government and supported unpopular leaders like Henry.

“What you have over the last 20 years is the consistent dismantling of the Haitian state,” Pierre said. “What intervention means for Haiti, what it has always meant, is death and destruction.”

Image: Workers unload humanitarian aid from a U.S. helicopter at Les Cayes airport in Haiti, Aug. 18, 2021.

In fact, the country’s situation was so dire that Henry was forced to travel abroad in the hope of securing a U.N. peacekeeping deal. He went to Kenya, which agreed to send 1,000 troops to coordinate an East African and U.N.-backed alliance to help restore order in Haiti, but the plan is now on hold . Kenya agreed last October to send a U.N.-sanctioned security force to Haiti, but Kenya’s courts decided it was unconstitutional. The result has been Haiti fending for itself. 

“A force like Kenya, they don’t speak Kreyòl, they don’t speak French,” Pierre said. “The Kenyan police are known for human rights abuses . So what does it tell us as Haitians that the only thing that you see that we deserve are not schools, not reparations for the cholera the U.N. brought , but more military with the mandate to use all kinds of force on our population? That is unacceptable.”  

Henry was forced to announce his planned resignation from Puerto Rico, as threats of violence — and armed groups taking over the airports — have prevented him from returning to his country.  

An elderly woman runs in front of the damaged police station building with tires burning in front of it

Now that Henry is to stand down, it is far from clear what the armed groups will do or demand next, aside from the right to govern. 

“It’s the Haitian people who know what they’re going through. It’s the Haitian people who are going to take destiny into their own hands. Haitian people will choose who will govern them,” Chérizier said recently, according to The Associated Press .

Haitians and their supporters have put forth their own solutions over the years, holding that foreign intervention routinely ignores the voices and desires of Haitians. 

In 2021, both Haitian and non-Haitian church leaders, women’s rights groups, lawyers, humanitarian workers, the Voodoo Sector and more created the Commission to Search for a Haitian Solution to the Crisis . The commission has proposed the “ Montana Accord ,” outlining a two-year interim government with oversight committees tasked with restoring order, eradicating corruption and establishing fair elections. 

For more from NBC BLK, sign up for our weekly newsletter .

CORRECTION (March 15, 2024, 9:58 a.m. ET): An earlier version of this article misstated which university Jemima Pierre is affiliated with. She is a professor at the University of British Columbia, Vancouver, not the University of California, Los Angeles, (or Columbia University, as an earlier correction misstated).

statement of the problem in research about poverty

Patrick Smith is a London-based editor and reporter for NBC News Digital.

statement of the problem in research about poverty

Char Adams is a reporter for NBC BLK who writes about race.

Why is the Islamic State group 'fixated' on Russia and what is ISIS-K?

A branch of Islamic State, the militant group that once sought control over swathes of Iraq and Syria, has claimed responsibility for a deadly terrorist attack at a Moscow concert hall .

At least 133 people were killed when camouflage-clad men armed with automatic weapons opened fire on concertgoers at the Crocus City Hall, about 20 kilometres from the Kremlin.

More specifically, the attack was claimed by ISIS-K, the Islamic State's Afghan branch.

Here's what we know about ISIS-K and its motivations for attacking Russia.

Two women crouch down to light candles in a crowd of people at a vigil

What is ISIS-K?

ISIS-K stands for Islamic State Khorasan . Khorasan is an old term for a region that included parts of Iran, Turkmenistan and Afghanistan.

The branch emerged in eastern Afghanistan in late 2014 and has a history of attacks inside and outside Afghanistan.

In September 2022, its militants claimed responsibility for a deadly suicide bombing at the Russian embassy in Kabul.

A masked Islamic State fighter poses in front of an IS flag with a rifle.

Are we sure ISIS-K is responsible?

Not entirely. Islamic State has in the past claimed attacks it had nothing to do with.

However, the group's claim it is behind the Moscow attack has been backed by US intelligence sources.

Islamic State's Amaq news agency posted a statement on Telegram following the deadly shooting, saying its fighters attacked on the outskirts of Moscow.

The statement said they killed and wounded hundreds, "causing great destruction to the place before they withdrew to their bases safely".

The US embassy in Russia had warned on March 8 that "extremists" had imminent plans for an attack in Moscow, hours after Russian security services said they had foiled an ISIS branch's planned shooting at a synagogue.

Image of a member of the Russian National Guard in army attire with a large automatic weapon. His face is covered.

What could ISIS-K's motive for the Russian attack be?

Experts say ISIS-K has opposed Russian President Vladimir Putin for years.

"ISIS-K has been fixated on Russia for the past two years, frequently criticising Putin in its propaganda," said Colin Clarke, with the Soufan Center, an independent foreign policy research centre.

Michael Kugelman of the Washington-based Wilson Center said ISIS-K "sees Russia as being complicit in activities that regularly oppress Muslims".

He added that the group also counted as members a number of Central Asian militants who had their own grievances with Moscow.

Putin changed the course of the Syrian civil war  when he intervened in 2015, supporting President Bashar al-Assad against the opposition and Islamic State.

The war began in 2011 after a pro-democracy uprising against al-Assad's authoritarian rule quickly expanded to fully fledged infighting, with Islamic State seizing large parts of Syria and Iraq by 2013.

At its height, Islamic State held about a third of Syria and 40 per cent of Iraq, but by the end of 2017 it had lost 95 per cent of its territory.

There is also a Caucasus branch of ISIS, which operates mainly in Russia's largely Muslim North Caucasus region, mainly in the Russian republics of Chechnya, Dagestan, Ingushetia and Kabardino-Balkaria.

Chechnya has a long history of rebelling against Moscow rule, with an Islamist insurgency leading to armed conflict between Russia and militants from 2007 to 2017.

Islamic State more broadly has long recruited fighters from Russia and other parts of the former Soviet Union.

Not the first terror attack on Russia

If Islamic State is behind the shooting, it would make it the latest of many Islamist-linked attacks in or against Russia over the past 20 years.

The country was shaken by a series of deadly terror attacks in the early 2000s during Russia's fighting with separatists in Chechnya.

In October 2002, Chechen militants took about 800 people hostage at a Moscow theatre. Two days later, Russian special forces stormed the building. 129 hostages and 41 Chechen fighters died, most of them from the effects of narcotic gas which Russian forces used to subdue the attackers.

In September 2004, about 30 Chechen militants seized a school in Beslan in southern Russia, taking hundreds of hostages. The siege ended in a bloodbath two days later. More than 330 people, about half of them children, were killed.

In October 2015, a bomb planted by Islamic State downed a Russian passenger plane over Sinai in Egypt, killing all 224 people on board. Most of them were Russians returning from holidays in Egypt.

The group has also claimed responsibility for several attacks in Caucasus and other Russian regions in the past years.

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    This study will focus on the Value Added Tax (VAT) and specifically the restructuring of VAT, and will aim to answer questions on (a) how the VAT structure could be changed, and (b) how any changes in the VAT structure would impact on the economy. 1.2. Poverty, Inequality and Unemployment in South Africa. Poverty in South Africa is severe.

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    Reviewing recent research on poverty in the United States, we derive a conceptual framework with three main characteristics. First, poverty is multidimensional, compounding material hardship with human frailty, generational trauma, family and neighborhood violence, and broken institutions. Second, poverty is relational, produced through connections between the truly advantaged and the truly ...

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    monetary perspective. Although widely used, monetary poverty is not the exclusive paradigm for poverty measurement and non-monetary dimensions of poverty are useful in assessing poverty components, particularly for case study research. Poverty is also associated with insufficient outcomes with respect to health, nutrition and literacy,

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    Regardless of its causes, poverty has devastating consequences for the people who live in it. Much research conducted and/or analyzed by scholars, government agencies, and nonprofit organizations has documented the effects of poverty (and near poverty) on the lives of the poor (Lindsey, 2009; Moore, et. al., 2009; Ratcliffe & McKernan, 2010; Sanders, 2011).

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    Research confirms poverty's negative influence on student behavior, achievement and retention in school (Greever, 2014). International research also proves that using sustainable ... of ways to combat poverty and break the cycle of generational poverty. Problem Statement Poverty is a problem in many schools. While teachers cannot solve the ...

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    Abington Heights also had the highest average family income ($89,636), the lowest percentage of families below the poverty line (3.6 percent), the lowest percentage of children in single family homes (13 percent), and the highest percentage of population with a HS diploma (95.9 percent).

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    Poverty: Statement of the Problem. In the year 2010, poverty rate in USA stood at 15.1% up from 14.3% recorded in the previous year-2009 (USA Census Bureau, 2011). At the same time, it was noted that poverty rate for the last four years has been increasing at an estimated rate of 2.6%.

  19. How to Write a Problem Statement

    Step 3: Set your aims and objectives. Finally, the problem statement should frame how you intend to address the problem. Your goal here should not be to find a conclusive solution, but rather to propose more effective approaches to tackling or understanding it. The research aim is the overall purpose of your research.

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    Overview. About 700 million people live on less than $2.15 per day, the extreme poverty line. Extreme poverty remains concentrated in parts of Sub-Saharan Africa, fragile and conflict-affected areas, and rural areas. After decades of progress, the pace of global poverty reduction began to slow by 2015, in tandem with subdued economic growth.

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    A statement of problem defines the cause that your research is working towards. It highlights a knowledge gap or gap between the actual state and the ideal state. Since your research will focus on the poverty of Ghanaian farmers, you could begin with an introductory statement explaining that the economy of Ghana is reliant on farmers.

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    Statement of the Problem . Poverty does impact and affect educational outcomes (Hernandez, 2011). For this study, the researcher examined the correlation between students living in poverty and academic achievement levels attained on two formative metrics, the SRI and MAP grade-level assessments.

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    Regional poverty estimates are now reported up to 2021, depending on sufficient data coverage over the period of the COVID-19 pandemic. Poverty data are reported for Europe and Central Asia until 2020, and Latin America and the Caribbean until 2021. For all other developing regions, poverty data are reported for pre-pandemic years (see Figure 1).

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    "ISIS-K has been fixated on Russia for the past two years, frequently criticising Putin in its propaganda," said Colin Clarke, with the Soufan Center, an independent foreign policy research centre.

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