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The Economic Lives of the Poor

The Economic Lives of the Poor Abstract The 1990 World Development Report from the World Bank defined the “extremely poor” people of the world as those who are currently living on no more than $$1 per day per person. But how actually does one live on less than $$1 per day? This essay is about the economic lives of the extremely poor: the choices they face, the constraints they grapple with, and the challenges they meet. A number of recent data sets and a body of new research allow us to start building an image of the way the extremely poor live their lives. Our discussion builds on household surveys conducted in 13 countries: Cote d'Ivoire, Guatemala, India, Indonesia, Mexico, Nicaragua, Pakistan, Panama, Papua New Guinea, Peru, South Africa, Tanzania, and Timor Leste (East Timor). These surveys provide detailed information on extremely poor households around the world, from Asia to Africa to Latin America, including information on what they consume, where they work, and how they save and borrow. We consider the extremely poor—those living in households where the consumption per capita is less than $$1.08 per person per day—as well as the merely “poor”—defined as those who live under $$2.16 a day—using 1993 purchasing power parity as benchmark. In keeping with convention, we call these the $$1 and $$2 dollar poverty lines, respectively. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economic Perspectives American Economic Association

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Publisher
American Economic Association
Copyright
Copyright © 2007 by the American Economic Association
Subject
Articles
ISSN
0895-3309
DOI
10.1257/jep.21.1.141
Publisher site
See Article on Publisher Site

Abstract

Abstract The 1990 World Development Report from the World Bank defined the “extremely poor” people of the world as those who are currently living on no more than $$1 per day per person. But how actually does one live on less than $$1 per day? This essay is about the economic lives of the extremely poor: the choices they face, the constraints they grapple with, and the challenges they meet. A number of recent data sets and a body of new research allow us to start building an image of the way the extremely poor live their lives. Our discussion builds on household surveys conducted in 13 countries: Cote d'Ivoire, Guatemala, India, Indonesia, Mexico, Nicaragua, Pakistan, Panama, Papua New Guinea, Peru, South Africa, Tanzania, and Timor Leste (East Timor). These surveys provide detailed information on extremely poor households around the world, from Asia to Africa to Latin America, including information on what they consume, where they work, and how they save and borrow. We consider the extremely poor—those living in households where the consumption per capita is less than $$1.08 per person per day—as well as the merely “poor”—defined as those who live under $$2.16 a day—using 1993 purchasing power parity as benchmark. In keeping with convention, we call these the $$1 and $$2 dollar poverty lines, respectively.

Journal

Journal of Economic PerspectivesAmerican Economic Association

Published: Feb 1, 2007

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