LAC Equity Lab: Poverty

The World Bank Group aims to end extreme poverty in the world by 2030, defined as decreasing the percentage of people living on less than $1.90 a day (2011 PPP prices) to no more than 3 percent of the global population.

By this measure, however, most countries in Latin America and the Caribbean (LAC) have low rates of extreme poverty. The level of economic development in the region has therefore led analysts to use regional poverty lines that are higher and more in line with LAC countries' official extreme and moderate poverty lines: $2.50-a-day and $4-a-day poverty lines (in 2005 PPP prices).

In addition, growing interest on the vulnerable and middle classes has led to the estimation of two other sets of lines. The vulnerable population are those who are not in poverty but not yet in the middle class. These households earn between $4 and $10-a-day (2005 PPP) and are currently the largest group in the region. The middle class are households that have a low probability of falling into poverty but are not rich. They have been defined as earning between $10 and $50-a-day (2005 PPP).

All these income classifications are used throughout the LAC Equity Lab.

The Poverty section of the LAC Equity Lab includes the following data:

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Poverty Rate

Trends in the poverty rate, the poverty gap, and the severity index under various poverty lines for the countries and sub-regions of LAC.

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Regional Distribution

The share of the population under different lines for different sub-regions.

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Poverty Drivers

The main drivers of the changes in poverty in the region and by country, under different lines, and for different indicators.

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Contribution of Income

The contribution of different income components to the overall change in either poverty or the Gini, under different poverty lines, different periods, and by country, sub-region or for LAC as a whole.