Where Do the World's Poor Live? A New Update

Abstract

This paper revisits, with new data, the changes in the distribution of global poverty towards middle-income countries (MICs). In doing so it discusses an implied ‘poverty paradox’– the fact that most of the world's extreme poor no longer live in the world's poorest countries.

The paper outlines the distribution of global poverty as follows: half of the world's poor live in India and China (mainly in India), a quarter of the world's poor live in other MICs (primarily populous lower MICs such as Pakistan, Nigeria and Indonesia) and a quarter of the world's poor live in the remaining 35 low-income countries. Underlying this pattern is a slightly more surprising one: only 7 per cent of world poverty remains in low-income, stable countries.

The paper discusses factors that are behind the shift in global poverty towards middle-income countries in particular and how sensitive the distribution of global poverty is to the thresholds for middle-income classification. The paper concludes with implications for research related to poverty.