Who are the Poor in the Developing World?

Abstract

This paper presents a new demographic profile of extreme and moderate poverty, defined as those living on less than $1.90 and between $1.90 and $3.10 per day in 2013, based on household survey data from 89 developing countries. The face of poverty is primarily rural and young; 80 percent of the extreme poor and 75 percent of the moderate poor live in rural areas. Over 45 percent of the extreme poor are children younger than 15 years old, and nearly 60 percent of the extreme poor live in households with three or more children. Gender differences in poverty rates are muted, and there is scant evidence of gender inequality in poor children's educational attainment. A sizable share of the extreme and moderate poor, 40 and 50 percent, respectively, have completed primary school. Compared with the extreme poor, the moderate poor are significantly more likely to have completed primary school and are less likely to work in agriculture. After conditioning on other individual and household characteristics, having fewer than three children, having greater educational attainment, and living in an urban area are strongly and positively associated with economic well-being. The results reinforce the central importance of households in rural areas and those containing large numbers of children in efforts to reduce extreme poverty, and are consistent with increased educational attainment and urbanization hastening poverty reduction.