Europe

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.

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 isn't surprising, given the agenda of the so-called "conservative" right for the last 46 years..

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.

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?

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.

The US should start to work on this

How about a poverty measure that includes housing prices, which I believe are far higher in Europe relative to wages?