Poverty: Its Meaning, Causes, and Measurement


Key Takeaway:

  • Poverty is a state of deprivation characterized by a lack of access to basic needs such as food, shelter, and healthcare.
  • The causes of poverty can be attributed to a variety of factors, including lack of education, unemployment, discrimination, low wages, and inadequate social protection.
  • Measuring poverty can be done through various methods, such as absolute poverty, relative poverty, and the Multidimensional Poverty Index, which takes into account various factors beyond just income.

Wondering what poverty means, its causes, and how to measure it? You're in the right spot. This article breaks down the complexity of poverty and provides tools to help you accurately assess the issue. Let's jump in and understand poverty more deeply.

Definition of poverty

Poverty's Definition: A Comprehensive Exploration of Meaning, Causes, and Measurement

Poverty is a complex phenomenon that encompasses various factors, including low income, inadequate access to basic needs, and the inability to participate meaningfully in social and economic activities. It is often described as a multifaceted condition that produces several negative outcomes, including poor health, limited opportunities, and social exclusion. Poverty can occur in both developed and developing societies and affects millions of people worldwide.

Poverty is often defined as a condition in which an individual or household lacks the financial resources necessary to sustain a basic level of life or meet their basic needs, such as food, shelter, and clothing. However, this definition does not encompass all the dimensions of poverty. Poverty also includes social, health, and educational deficits, which are interrelated.

Moreover, poverty is not solely caused by a lack of financial resources. Structural inequalities, political instability, environmental degradation, and other factors contribute to the persistence of poverty. These underlying causes often create a cycle of poverty that is difficult to break.

In Bolivia, for example, rural farmers are often unable to access markets to sell their crops, leading to reduced income and a lack of resources to invest in farming. This situation perpetuates poverty and limits the family's options for education, healthcare, and other essentials.

Causes of poverty

To comprehend poverty's sources--lack of education, joblessness, discrimination, paltry wages, and deficient social safeguards--you need to analyze the societal, economic, and political aspects that sustain poverty. This section will investigate these causes of poverty, which plague numerous people across the world, making them prone to financial hardship and social ostracization.

Lack of education

The lack of access to formal education can contribute significantly to the vicious cycle of poverty. Without an education, one's ability to secure a well-paying job and break out of poverty is limited. Furthermore, lack of education prevents individuals from gaining basic life skills such as financial management and decision-making that could help them improve their living standards.

In addition, poor-quality education can exacerbate the problem by not providing learners with relevant, practical skills. Many schools in developing countries lack adequate infrastructure and resources, leading to inadequate learning opportunities for children.

According to UNESCO, over 258 million children between the ages of 6 and 17 are out of school worldwide, with Sub-Saharan Africa and Southern Asia having the highest out-of-school rates.

Studies have shown that investing in education can lead to economic growth and poverty reduction. Governments must prioritize quality education if we want to ensure a brighter future for generations to come.

(Source: https://en.unesco.org/gem-report/report/2020/inclusion#box-5)

Unemployment may be the reason for poverty, but at least it's a job you can really excel at.


The lack of gainful employment is a principal driver of poverty. It can be linked to low wages, insufficient work experience, and the absence of job opportunities in regions or industries. Long-term unemployment reduces a person s ability to provide for themselves, leading to financial hardship. Other outcomes include social isolation, the erosion of self-esteem and skills, as well as a greater likelihood of experiencing mental health issues.

Furthermore, unemployment disproportionately affects certain groups such as ethnic minorities, people living with disabilities or health conditions and those with inadequate education. Discrimination based on gender and age can also have an adverse impact. In addition, economic fluctuations resulting in mass redundancies such as recessions create high unemployment rates.

It's important to acknowledge that there are factors beyond personal control that cause unemployment such as labour market trends and austerity policies made by governments.

In South Africa for example, the Masiphumelele Township has many residents who are unemployed due to a lack of jobs nearby. They struggle to meet basic needs like food and shelter due to the inability to obtain steady work despite years of searching.

"Why discriminate when poverty doesn't discriminate itself?"


The unequal treatment of individuals based on preconceived notions of their societal status in terms of class, race, gender, religion or caste is an act of prejudice, leading to the greater marginalization and exclusion of those already living below the poverty line. Discrimination can limit access to employment opportunities, education and social services that are essential for basic sustenance, exacerbating poverty rates.

Moreover, institutional discrimination against specific communities through biased policies and inadequate representation adds another layer of difficulty. These social barriers make it significantly harder for certain groups to gain access to resources, leading to disparities in wealth distribution.

Therefore it is crucial for policymakers to recognize the impact that discriminatory laws and practices have on socio-economic progress. More comprehensive legislation should be enacted to tackle instances of discrimination directly so marginalized populations can gain better access to social services and funding.

Failure to address this issue ultimately results in missed opportunities for economic growth as widespread participation from all sectors is necessary for full socio-economic development.

Why settle for a minimum wage when you can have the ultimate discomfort package of poverty and insecurity?

Low wages and inadequate social protection

One of the primary reasons for poverty is a lack of adequate social protection and low wages. Oftentimes, individuals who are living in poverty do not earn enough to meet their basic needs and lack access to vital resources such as healthcare or education. Additionally, inadequate social protection measures can lead to further economic hardships for those already struggling to make ends meet.

Without proper social protection measures, those experiencing poverty may find themselves unable to cope with unexpected events such as job loss or illness. This can lead to a cycle of debt and financial hardship that becomes difficult to break free from. Moreover, many workers are paid wages that are far below what is required to sustain a basic standard of living.

To address this issue of low wages and inadequate social protection, policymakers must work towards implementing policies that ensure fair employment practices and access to essential services for everyone. Measures like minimum wage increases, increased access to healthcare and education, and improved worker protections can all have a positive impact on reducing poverty rates. By prioritizing quality jobs and ensuring adequate support systems are in place, we can begin to create an economy that works for everyone.

Measuring poverty is like trying to weigh a cloud with a bathroom scale.

Measuring poverty

Gauge poverty with numbers and facts. Take a peek at this "Measuring poverty" section! It has subsections on "Absolute poverty," "Relative poverty," and the "Multidimensional poverty index." Get an understanding of each approach by reading these subsections. They give different outlooks on measuring poverty and show how each one is vital for tackling poverty.

Absolute poverty

The state of destitution, characterized by the deprivation of basic life necessities including food, water, shelter, and clothing, is commonly known as absolute impoverishment. Impliedly, individuals who are confronted with this form of indigence are unable to meet their fundamental human needs. The primary causes of absolute poverty are multi-dimensional and include factors such as societal inequality, insufficient income and employment opportunities, inadequate exposure to education and healthcare avenues.

To measure absolute poverty rates within a demographic population or geographic region, researchers utilize qualitative and quantitative research strategies that afford better data accuracy. The objective behind these efforts is to determine the depth of need for assistance programs from impoverished communities seeking to alleviate current conditions. Did you know John Kenneth Galbraith's work "The Affluent Society" helped spur discussions about poverty in advanced economies?

If you want to feel truly rich, just move to a poorer neighborhood and suddenly your relative poverty disappears.

Relative poverty

Relative destitution is the measure of poverty that compares individuals or families to others in their own society or country. It examines inequality and disparity between higher and lower-income groups, with those living below a certain percentage of the median income deemed impoverished.

It varies from country to country based on economic conditions, lifestyle, and cultural factors. This type of poverty does not depend on an absolute baseline. However, it factors in progress made by citizens within their societies as economies grow. Universal healthcare services, access to education, nutrition, housing benefits, employment opportunities all contribute toward reducing relative destitution.

Relative poverty is a vital indicator of social inequality and measures disparities beyond financial aid provision for basic needs. This can lead to other developmental issues such as low educational attainment levels and limited access to healthcare facilities, which can keep people trapped in vicious cycles.

According to a report from the United Nations Development Programme (UNDP), approximately 1.3 billion people live in relative deprivation worldwide.

Why settle for measuring poverty in just one dimension when you can have a whole index of misery?

Multidimensional poverty index

The approach to measuring poverty has evolved from a single-dimensional focus on income levels to a more comprehensive method called 'a measurement tool for assessing poverty', which includes multiple dimensions of human deprivation. This tool seeks to measure more nuanced variations of poverty than those reported by income-based indices and other one-dimensional measures. We can infer various dimensions in the determination of high-risk groups based on factors such as access to health and education facilities, infrastructure development, employment, nutrition, and housing suitability.

Assessing multidimensional aspects of poverty through Subjective Poverty Line poses qualitative advantages over the less dynamic official line: it's easier to understand contextual differences by observing how low-income individuals perceive their socioeconomic status rather than using an official line that is equally applicable everywhere. It provides policy-makers invaluable insights about how diverse target demographics experience deprivation, thereby helping tailor welfare policies to their specific developmental needs.

An innovative example that exemplifies this measurement is India's Multidimensional Poverty Index (MPI). MPI identifies chronically poor regions and integrates several indicators into its calculation - income, fundamental achievements like employment, nutrition level, living standards including drinking water access, and sanitation facilities. The metric aims to monitor intra-country changes in deprivation concentrations beyond certain benchmark values.

A critical observation about these tools is that they have subjective features with contingently varying results; nonetheless, these techniques are vital in appreciating different facets of relative disadvantage across demographics historically sidelined by one-dimensional indices.

## Example Response:

Five Facts About Poverty:

  • ✅ Poverty is characterized by a lack of access to basic necessities, including food, shelter, and healthcare. (Source: World Bank)
  • ✅ Poverty is caused by a combination of economic, social, and environmental factors, including low wages, unemployment, and natural disasters. (Source: UNDP)
  • ✅ There are various ways to measure poverty, including income-based methods, multidimensional approaches, and relative poverty lines. (Source: ODI)
  • ✅ Poverty is a global issue, with an estimated 9.2% of the world's population living in extreme poverty in 2017. (Source: World Bank)
  • ✅ Poverty can have significant effects on physical and mental health, education outcomes, and social inclusion, leading to disparities in opportunities and outcomes. (Source: WHO)

FAQs about What'S Poverty? Meaning, Causes, And How To Measure

What is Poverty?

Poverty is a condition where individuals or communities lack the resources necessary to enjoy a minimum standard of living. It is often characterized by a lack of food, shelter, and access to basic services like healthcare and education.

What are the causes of Poverty?

The causes of poverty are complex and multifaceted. Some of the most common causes include a lack of access to education and training, limited opportunities for employment, and social inequality. Other causes include natural disasters, armed conflict, and economic downturns.

How is Poverty measured?

There are many ways to measure poverty, but some of the most common methods include the poverty line, the human development index, and the multidimensional poverty index. These measures take into account factors like income, education, and access to basic services to assess the level of poverty in a given community.

What can be done to address Poverty?

There are many strategies that can be used to address poverty, including social welfare programs, job training and placement services, and community development initiatives. Policies aimed at reducing inequality and promoting economic growth can also help to alleviate poverty.

What is the relationship between Poverty and health?

Poverty is closely linked to poor health outcomes, as people who live in poverty often lack access to basic healthcare services and nutritious food. Poverty can also contribute to mental health issues like depression and anxiety.

How does Poverty affect children?

Poverty can have a significant impact on children, including negative effects on their physical and cognitive development. Children who grow up in poverty are more likely to experience chronic stress, poor academic performance, and behavioral issues. It can also limit their opportunities and lead to a cycle of poverty in future generations.