This is the author’s post at Oxford: https://www.rsc.ox.ac.uk/news/global-poverty-trends-through-a-new-lens-olivier-sterck-article-for-voxdev
Has global poverty fallen since 1990? Depending on which poverty line you use, the answer ranges from “we’ve made huge progress” to “nothing has changed”.
Using the World Bank’s extreme poverty line of US$2.15/day (in 2017 PPP), the share of people in poverty fell from 38% of the world’s population in 1990 (about 2 billion people) to 8.5% in 2024 (690 million people) (Figure 1). This is often cited as a historic success.
But raise the line – say to $21.5/day, as suggested by Pritchett and Viarengo (2025), or $30/day, as argued by Roser (2024) – and the picture changes entirely. The poverty rate is then extremely high, above 75%, and has barely budged since 1990. In absolute terms, the poverty headcount has even increased, from over 4 billion poor people in 1990 to over 6 billion poor people in 2024. Based on these numbers, the fight against global poverty appears to have failed.
This divergence is not just a statistical quirk. All mainstream poverty measures share the same fundamental feature: they ignore everyone above the chosen line. With the extreme poverty line of the World Bank ($2.15/day), someone earning $2.16/day is treated as equally non-poor as someone earning $10, $100, or $1,000/day. Billions of low-income people – who most would agree still live in poverty – are therefore excluded from the statistics. And because there is no consensus on where to set the line, it is tempting to pick the one that tells the story you want.
In Sterck (2026), I propose to measure income poverty without a poverty line. The idea is to measure poverty across the entire income distribution, rather than classifying people as poor or non-poor based on an arbitrary threshold.
The measure’s key intuition is simple: if person A earns half as much as person B, then A is twice as poor. Poverty is therefore simply measured as the reciprocal of income, and its unit is simply inverted. If incomes are measured in dollars per day ($/day), poverty is measured in days per dollar (days/$).
Average poverty is simply the average time it takes to earn $1 in a given population.
In 2024, that value was equivalent to:
- 1 day in DR Congo, Madagascar, South Sudan, and Mozambique
- 12 hours in Haiti
- 2 hours in China
- 85 minutes in the US
- 25 minutes in Switzerland.
I never thought of using the reciprocal to measure the lower end of the distribution that is really interesting.
Thank you!
While this metric seems like a big win to evaluate poverty, it does not behave very well mathematically. Nobody makes infinite money/wealth, which makes wealth per day a stable metric. However, if someone makes very close to 0 wealth, the day per wealth metric will explode to infinity. One single individual can skew the day per wealth metric.
Other lemmees suggested to use the median. Or you can also try to incorporate the living cost by dividing the income by the cost of living. Maybe looking into quartiles or mean less multiples of standard deviation? Idk
Easily fixed by defining wealth as wealth + 1.
Here’s my take on it.
Read Hunter Thompson’s nonfiction book, 'Hell’s Angels."
There’s a chapter in it about the economics of being a hippie/biker/dropout circa 1970.
A biker could get a Union stevedore job, work six months, and have enough to go out on the road for two years. A part-time waitress could earn enough to support herself and her boyfriend.
This is still largely the case. The problem is that there are not many skilled manufacturing jobs around that allow you to drop in and out like that, and that rental prices in larger cities have gone through the roof.
Sure, those are somewhat related to the economy at large, but also very specific issues that have less to do with general poverty or income levels.
Where do you live where a part time waitress makes enough to support two people?
In Germany minimum wage for a 20h/week waitress job would be 940€/month + tips after taxes. The boyfriend would get unemployment benefits of 500€/month. The main issue here is cheap housing, but especially in east Germany and more rural parts of the country, you can still find flats for 500€/month. It is obviously living on the cheap, but entirely possible.
The boyfriend would get unemployment benefits of 500€/month.
Idk how it is in Germany, but here in Italy you have to have held a job that fired you for, let’s say, non-disciplinary reasons, you must not have resigned yourself, and you have to subscribe to unemployment lists, which means an agency will have the task of finding you a suitable (shitty) job which you can’t refuse or you’ll lose your benefits.
Nice to know that some places are still living the american dream.
That’s amazing!
In the hypothetical scenario of not having to pay rent, that is pretty much the case anywere in Europe.
Where did I say they weren’t paying rent?
“Supporting yourself” implies an entire household. A place to live, food on the table, clothes, and miscellaneous expenses.
And by ‘part-time waitress’ I meant someone working at a regular diner/restaurant. I’m sure there are people working high end strip clubs who bring home thousands in tips.
Even if the young couple is living in a parent’s house they’d be hard pressed.
Finally, stevedore in the 1970’s meant a laborer unloading ships by hand. Maybe today it means someone operating a crane, but back in the day it was not some high tech/high pay job.
I said it is mainly a rent issue, and not an income or general price level issue. Yes two people on a single part-time income (living rent free) in a low income sector isn’t easy, but it wasn’t easy in the 1970ties either.
As for the other example. This still exists. I know people working as scuba divers on oil rigs that work 1-2 months a year only. This isn’t a very highly skilled job and mostly involves manual labor, but it is difficult to find jobs like that these days, which was probably easier in the 1970ties due to various factors that are not directly related to income or poverty levels.
First, scuba diver on an oil rig is a skilled job. Highly skilled.
Commercial divers must have completed a diver training program through an Association of Diving Contractors International, Inc.-accredited commercial diving technical institute or military program. Diver training programs often teach students both how to dive underwater with oxygen supplied from the surface or scuba diving equipment and how to perform construction work underwater, such as welding and rigging, as well as first aid and other skills.
Many employers require commercial divers to have an Occupational Safety and Health Administration-compliant commercial diver certification. The Association of Diving Contractors International, Inc., or the International Marine Contractors Association, offers certifications in various different diving tasks and specializations.
Commercial divers generally start as entry-level tender divers and, with experience, hours of dive time, and additional certifications, can advance to work on more complex projects and receive greater compensation.
US government publication.
I did a quick search. In 1970 the Rolling Stones did a concert in Toronto. Ticket prices were $8.00, well within reach of our waitress.
2026 tickets are $150.00.
It is a job with a lot of bureocratic red tape, but the work they actually do does not require years of study and deep understanding of a specific subject.
They also don’t earn exceptionally well. The reason they can do that is because it is largely gig work that can be done 1-2 months a year easily.
Also you can’t compare tickets prices of a classic band that largely caters to now well off boomers with what they charged in the 1970ties.
The $8 with inflation and all that comes to approximatly $25-30 or so in 2026 dollars, which is similar to what an entry ticket to a concert of a lesser known band costs these days. And as an occasional treat that is still affordable for low income people.
I’m kind of relieved to see this new measurement because it gives back some credibility to the social sciences/economics.
Anybody who has been in the US cannot miss the abundant poverty, which is unseen and unheard of in Western Europe.
This isn’t surprising, given the agenda of the so-called “conservative” right for the last 46 years…
Nice read, I took a look at the paper and it looks like a really nice metric. Having people twice as poor counting twice as much makes a lot of sense. Very nice way to handle both relative poverty and absolute poverty while not ignoring how some people are much poorer than others.
You mean a realistic method instead of an edited version?
There definitely is an edited version out there, but the scientist does propose a novel way to measure poverty. I’m saying this not to argue, but to inform the people who might not open the article because of this comment.
That was not suggesting a different version of this article, but was more a reference to the fact that the US government has always been less than forthcoming about the true state of the economy and how well people are doing. A classic example would be how many people are underemployed but are still counted as being part of a healthy system. Or how working two or more jobs means you’re “employed”, with no suggestion of the workload needed to maintain the household. And now, the current administration is more willing just to disappear numbers than to try to make them look correct.
Averages are affected a lot by outliers with very large values, and the effect is larger when there’s large inequalities. If measuring by income or wealth (higher is better) in a stadium with 1 billionaire and 999 homeless people, the average people is millionnaire.
This study still uses averages and flips the effect with a povery score (higher is worse). It gives more weight to the other end of a spectrum, very poor persons that need 300min to win 1$ makes the average much higher.
Using median values, or better 20-80 centiles values would be more meaningful.
I mean giving the lower end more weight is kind of the whole point of this exercise. The effect you’re describing is a good thing in this scenario.
The US should start to work on this
Going to bookmark this for the next time I hear Europeans chastise Americans for being rich and too comfortable and lazy to fight fascism.
Putting aside social safety nets, an average American needs to work nearly 2.5x as long for the same dollar as an average German. And because that number is inclusive of the whole population, I have a sneaking suspicion that the USA’s larger Gini coefficient makes that ratio even higher between the poorer American vs poorer German.
Yep, you are right. It’s on Europeans to mitigate the fallout, and Americans can leave depending on the midterms.
How about a poverty measure that includes housing prices, which I believe are far higher in Europe relative to wages?
Does the US not have the same problem?
Sure, you can buy a house in somewhere in the middle of nowhere in the US, but that’s similar in the EU, Northern Croatia was literally giving houses away to people committing to live there.
