Poverty is down but inequality is rising, says World Bank report

Global poverty has fallen but the gap between rich and poor is widening, a new study reveals.

The Global Monitoring Report 2014/2015, published jointly by the World Bank Group and the International Monetary Fund, says that 14% of the world’s population now lives in extreme poverty, defined as living on less than US$1.25 a day. This is down from 19% in 2008.

But the report also states that global inequality is worse now than at any time since the Second World War, with the world’s richest 10% earning 9.5 times more than the poorest 10%. In 2008, the richest tenth earned seven times more.

Kaushik Basu, Chief Economist for the World Bank Group, said: "If it is shocking to have a poverty line as low as $1.25 a day, it is even more shocking that 1/7th of the world's population lives below this line. The levels of inequality and poverty that prevail in the world today are totally unacceptable."

Last year, the Bank announced its goal to reduce the extreme poverty rate to 3% of the global population by 2030.

Our author Gary S. Fields has written about the relationship between self-employment and poverty in developing countries. He argues that as most of the world’s poor are self-employed, policies should be adopted that boost earnings for the self-employed and help them to move into higher-paying wage jobs.

Meanwhile, Laura Zimmermann has written about the role of public works programs in reducing poverty. She writes that public works programs can generate important benefits in developing economies, if they are designed and implemented effectively.

Today, the United Nations observes the International Day for the Eradication of Poverty, which this year takes its theme as "Leave no one behind: think, decide and act together against extreme poverty."

The Global Monitoring Report can be read here.

Related articles:
Self-employment and poverty in developing countries, by Gary S. Fields
Public works programs in developing countries have the potential to reduce poverty, by Laura Zimmermann