Estimating growth requirements for reducing working poverty: can the world halve working poverty by 2015?

This paper explores poverty among the working population in developing countries. The aim is to provide an updated and expanded set of world and regional working poverty estimates, and thereby form a clearer picture of the magnitude and depth of poverty among the world’s workers. The paper also aims to estimate working poverty until 2015.

Findings of the paper include:

• whereas East Asia had 50 per cent of the world’s $1 working poor in 1980, the region has less than 15 per cent today
• Sub-Saharan Africa’s weak economic performance has resulted in the region now accounting for over 40 per cent of the world’s $1 working poor
• most $2 working poverty still remains in South Asia
• by 2015 South Asia will account for a full 40 per cent of the world’s $2 working poor

The world’s developing countries would need to grow at a 4.7 per cent annual rate to halve $1 working poverty and by 10.4 per cent to halve $2 working poverty. Given the 5- and 10-year historical growth rates of 5.4 and 5 per cent respectively, it is clear that the world is well on track to reach the target for $1 working poverty but not $2 working poverty. However East Asia’s exceptionally strong poverty-reducing performance is driving much of this forecast, and if East Asia was taken out of the picture, the remainder of the developing world does not appear to be on track to reduce working poverty by half .