DISCUSSION PAPER Poverty & Equity Global Estimate of Children in Monetary Poverty: An Update Ani Rudra Silwal, Solrun Engilbertsdottir, Jose Cuesta, David Newhouse, David Stewart This note builds on previous collaboration between the World Bank Group and UNICEF to estimate the global extent of child poverty. We estimate that in 2017, 17.5 percent of children in the world (or 356 million) younger than 18 years lived on less than $1.90 PPP per day, as opposed to 7.9 percent of adults ages 18 and above. The poverty rate of children at the $3.20 and $5.50 lines were 41.5 and 66.7 percent, respectively. The number of children living in extreme poverty declined by approximately 29 million between 2013 and 2017. In 2017, Sub-Saharan Africa accounted for two thirds of extremely poor children, and South Asia another 18 percent. These estimates are based on the Global Monitoring Database (GMD) of household surveys compiled in Spring 2020 and consists of surveys from 149 countries that are also used for the official World Bank poverty estimates. Because the estimates pertain to 2017, they do not consider the adverse economic impact of the COVID-19 pandemic. The Sustainable Development Goal (SDG) of partners working to improve the lives of the poorest ending poverty by 2030 is central to the work of children and their families. the World Bank Group and UNICEF. SDG 1.2.2 recognizes that reducing poverty among children is a The findings suggest that children were still crucial element of this goal. This effort requires disproportionately more likely to be in households routine reporting of poverty to measure progress living under $1.90 PPP per day in 2017 compared towards that goal. In 2016, the World Bank and to adults (17.5% vs. 7.9%). This is a moderate UNICEF released the first ever global estimates of improvement over 2013, when it was estimated that children living in extreme poverty defined by the 19.5% of children and 9.2% of all adults were living international poverty line of $1.90 PPP per day under $1.90 PPP per day. The number of children (UNICEF and World Bank, 2016). This note presents living in extreme poverty fell in all regions of the world estimates for 2017 using the Global Monitoring except for Sub-Saharan Africa, where they are Database (GMD) of household surveys compiled in estimated to have increased from 170 million in 2013 spring 2020 and consists of surveys from 149 to 234 million in 2017. countries that are also used for the official World Bank poverty estimates. Because the estimates pertain to 2017, they do not consider the adverse economic impact of the COVID-19 pandemic. Data and Methodology This note describes the characteristics of children living in poverty and disaggregates the analysis by This exercise builds on a similar one conducted in geographic region, income group, and residence in 2016 to examine child poverty globally using the a fragile or conflict-affected country. The profile of GMD (Newhouse, Suarez-Becerra, and Evans, extreme poor children is also presented by age group, 2017). The analysis of child poverty presented below gender, location, household characteristics, and the is derived from a combined sample of surveys alternative poverty lines of $3.20 PPP and $5.50 PPP. containing records on 10.8 million individuals from This information will be useful for governments and all 149 countries, including 34 high-income countries, taken from the Spring 2020 version of the GMD. The under $1.90 PPP per day compared to 7.9 percent GMD is a collection of globally harmonized household of adults (Table 1)1. Although this is an improvement survey data compiled by the Data for Goals group of over 2013, extreme poverty among children seems the World Bank’s Poverty and Equity Global Practice. not to have not fallen as much (19.5% to 17.5%) as it Further details on the background of the GMD are has done so for adults (9.2% to 7.9%) in relative given in Castañeda et al. (2016). A unique feature of terms. The youngest children are the worst off – the GMD is that the welfare aggregates are the same nearly 20 percent of all children below 5 in the as those used to compute the poverty estimates developing world live in extreme poor households published by PovcalNet and the World Development (Table 2 in the appendix). These estimates also Indicators. These aggregates are based on household suggest that the concentration of poverty among per capita income or consumption, depending on the children increased between 2013 and 2017. In other specific concept that is used to measure national words, a larger share of the global poor were poverty in any given country. children in 2017 compared to that in 2013. A possible reason behind this is the fact that the average A challenge in estimating the magnitude of child poverty gap at the $1.90 PPP line of children younger poverty is that the inputs that are required to than 18 years is greater (5.8%) than that that of generate these estimates are compiled at different adults (2.5%) as seen in Table 2 in the appendix. In points in time. However, attempts were made to other words, children live further away from the make this computation as internally consistent as poverty line than do adults. This makes sense since possible given the availability of data. The GMD used larger households are also more likely to be poorer. in this note was generated based on data compiled for the Annual Meetings of the World Bank and the IMF Higher rates of poverty among children in Fall 2020. The global poverty headcount rate for compared to adults partly result from the method 2017 are consistent with the Spring 2020 release of used to calculate poverty, which is based on PovcalNet. The estimate of global population is taken income or consumption per capita. Using a from the World Population Prospects 2019 (United household equivalence scale that gives less weight to Nations 2019). The estimates of the total number of children would reduce the gap in poverty rates children in poverty is derived from the estimated ratio between children and adults. However, in 2016 the of poor children to total population in the GMD child poverty rate remained higher than those for database. This is by construction equal to the adults under all reasonable two-parameter estimated child poverty rate times the share of the equivalence scales (Newhouse, Suarez-Becerra, and population in the sample that are children. Evans 2017), and based on the trends for children and adults observed here there is no reason to believe this has changed in the intervening five years. Results The geographic distribution of children living in extreme poor households is also striking (Table 3 in the Appendix). Sub-Saharan Africa has both the The findings of the analysis demonstrate that highest rates of children living in extreme poverty at children are disproportionately affected by just under 45.8 percent, and the largest share of the extreme poverty. In 2017, they were twice as world’s extreme poor children, at 65.8 percent. Two likely (17.5 percent) to be in households that live out of three extreme poor children in the world now 1 We cannot accurately compute the uncertainty around this estimate the sampling weight. Future versions of GMD may have complete given the current set up of the GMD. Doing so would require information on the PSU, which would allow us to compute the information on the primary sampling unit (PSU) of the survey, not just standard error of the poverty estimate. October 2020 live in Sub-Saharan Africa. Since countries without Therefore, 84 percent of extremely poor children in data such as such as Somalia and Eritrea are not the world reside in either Sub-Saharan Africa or included in the analysis, the real share could be even South Asia. These findings remain even when we use higher. Of all the geographic regions, South Asia has higher poverty lines of $3.20 and $5.50 PPP per day the second highest share of children living in extreme (Table 5 in the appendix). The child poverty rates at poverty, at 10.2 percent, and accounts for 18.1 the $3.20 line is 41.5 percent and the rate at the percent of the world’s extremely poor children. $5.50 line is 66.7 percent. Table 1: Description of data and global estimates of children in monetary poverty in 2013 and 2017 2013 2017 Poverty line in 2011 PPP $ $1.90 $1.90 $3.20 $5.50 Number of countries in GMD 89 149 Low and middle-income 76 115 High-income 13 34 Number of individuals in GMD, millions 7.7 10.8 Total population represented in GMD, millions 5,249 6,601 Population of children represented in GMD, millions 1,686 1,764 Population of poor in GMD, mn 655 710 1,898 3,407 Population of children in poverty in GMD, mn 329 356 841 1,351 Share of children in poverty 19.5% 17.5% 41.5% 66.7% Share of adults that are poor 9.2% 7.9% 23.5% 45.8% Population living in poverty in the world, mn 766 710 1,898 3,407 Population in poverty in developing countries, mn 766 707 1,892 3,396 Children in poverty in developing countries, mn 385 356 841 1,351 Sources: GMD, UNDESA, WDI, PovcalNet. Child poverty is more prevalent in countries prone work, a richer analysis of child poverty by the to conflict. About 41.6 percent of children who live in informality of work of workers in the family, household fragile and conflict-affected countries affected by composition, and gender could be conducted, similar conflict and fragility live in extremely poor to Boudet at al. (2018), using existing data in the GMD households, compared to 14.8 percent of children in as this may yield additional insights. other countries (Table 5 in the appendix). However, these fragile and conflict-affected countries only Explaining changes in the magnitude and nature account for a quarter of poor children. Tables 6-12 in of child poverty between 2013 and 2017 is not the appendix present further results on the extent of straightforward with the data that are available to child poverty disaggregated by gender, location, us. One set of changes affecting these estimates is household size, and characteristics of the household economic in nature, such as GDP growth and the head such as gender, education, and industry of work. distribution of this growth within countries. Strikingly, 71.3 percent of poor children live in a Demographic changes such as the structure of the household where the head works in agriculture. This population may have changed between 2013 and suggests that policies that improve agricultural 2017 to some degree. In addition to these changes, productivity or otherwise support poor farmers can be small differences may arise due to new surveys being an effective way to target poor children. In future October 2020 added to GMD2. It is difficult to assess the relative security. Preliminary projections from UNICEF and contribution of these issues given their complexity Save the Children suggest that the number of children and the limited number of variables in the GMD. living in poor households (as defined by the national poverty lines) may increase by up to 117 million by the end of 2020, although these estimates could change Conclusion drastically as the pandemic is still ongoing. The estimates presented in this note are intended to provide inputs to UNICEF and World Bank efforts to This note is the result of a collaboration between monitor SDG 1.1. Future work will attempt to the World Bank and UNICEF to estimate the global understand the overlap between multidimensional magnitude of children in monetary poverty in and monetary child poverty using data in the GMD. It 2017 to help monitor progress towards SDG 1.1. would also be useful to use the data to better We use the most recent data from household surveys understand the economic conditions and policies that available in GMD and the World Bank’s official have enabled some countries reduce child poverty estimates of global poverty. This is an update to a faster than others. similar exercise conducted for 2013 (Newhouse et al. 2017). Results suggest that 17.1% of children under 18 years of age still live under $1.90 PPP per day, a moderate reduction from the 19.5% found in 2013 but still twice as much as the poverty rate of adults (7.6%). This implies that 30 million fewer children live under extreme poverty in 2017 compared to 2013. However, there is no room for complacency since the share of children living under higher poverty lines is still staggering: more than two out of five children still live under $3.20 PPP per day in and two out of three children still live under $5.50 PPP per day. Moreover, ABOUT THE AUTHORS the concentration of poor children in Sub-Saharan Ani Rudra Silwal is an Economist Consultant in the Africa is also a concern, where two-thirds of all World Bank’s Poverty and Equity Global Practice. children under extreme poverty lived in 2017, an Solrun Engilbertsdottir is a Social Policy Specialist increase from 52% in 2013. focusing on child poverty at UNICEF. The estimates presented in this note do not Jose Cuesta is Lead Economist in the World Bank’s capture the effects of the COVID-19 crisis on child Social Sustainability and Inclusion Global Practice. poverty since all of the household surveys included David Newhouse is a Senior Economist in the World in our analysis predate this ongoing pandemic. Bank’s Poverty and Equity Global Practice. However, it is likely that the estimates of child poverty presented here will worsen as a result of COVID-19’s David Stewart is Chief of Child Poverty and Social adverse impact on income generation and food Protection at UNICEF. 2 These changes are described in PovcalNet documentation, available at What is new on the PovcalNet website. October 2020 4 REFERENCES • Boudet, Ana Maria Munoz, Paola Buitrago, Benedicte Leroy de la Briere, David Newhouse, Eliana Rubiano Matulevich, Kinnon Scott, and Pablo Suarez-Becerra. Gender differences in poverty and household composition through the life-cycle: A global perspective. The World Bank, 2018. • Castañeda, Andrés, Dung Doan, David Newhouse, Minh Cong Nguyen, Hiroki Uematsu, and João Pedro Azevedo. A new profile of the global poor. World Development 101 (2018): 250-267. • Newhouse, David, Pablo Suárez Becerra, and Martin Evans. New global estimates of child poverty and their sensitivity to alternative equivalence scales. Economics Letters 157 (2017): 125-128. • United Nations, Department of Economic and Social Affairs, Population Division. World Population Prospects 2019, Online Edition. Rev. 1. 2019. • UNICEF and World Bank. Ending Extreme Poverty: A Focus on Children. UNICEF and the World Bank Group. 2016. • World Bank. Poverty and Shared Prosperity 2016: Taking on Inequality. Washington, DC: World Bank. 2016. October 2020 5 APPENDIX Table 2: Children in monetary poverty in 2017 at the $1.90 line in 2011 PPP by age group Age group Extreme poor Headcount Share of Share of Poverty (millions) poverty rate extreme poor population gap ratio (%) (%) (%) (%) Children 0-17 355.5 17.5 50.1 31.1 5.8 Children 0-4 107.0 19.7 15.1 8.3 6.5 Children 5-9 113.2 19.2 15.9 9.1 6.4 Children 10-14 93.8 16.5 13.2 8.8 5.4 Children 15-17 41.6 12.9 5.9 5.0 4.3 Adults (18 or more) 354.1 7.9 49.9 68.9 2.5 Adults 18-59 302.0 8.3 42.6 56.0 2.6 Adults 60 or more 52.1 6.2 7.3 12.9 2.3 Total 709.6 10.9 100.0 100.0 3.5 Note: The sources of this and subsequent tables are authors’ analysis of Global Monitoring Database and PovcalNet. Table 3: Children in monetary poverty in 2017 at the $1.90 line in 2011 PPP by region Region Extreme poor Headcount Share of Share of (millions) poverty rate extreme poor population (%) (%) (%) East Asia and Pacific 24.2 5.9 6.8 20.1 of which: China 11.9 5.9 3.4 10.0 South Asia 64.3 10.2 18.1 31.2 of which: India 53.3 11.7 15.0 22.6 Sub-Saharan Africa 234.1 45.8 65.8 25.2 of which: Nigeria 45.4 45.9 12.8 4.9 Latin America and Caribbean 11.9 6.6 3.3 8.9 Europe and Central Asia 10.2 5.9 2.9 8.5 Middle East and North Africa 10.8 8.9 3.0 6.0 Total 355.5 17.5 100.0 100.0 Table 4: Children in monetary poverty in 2017 at the $1.90 line in 2011 PPP by income group Income group Extreme poor Headcount Share of extreme Share of (millions) poverty rate poor (%) population (%) (%) Low income 137.8 48.0 38.8 14.2 Lower middle income 183.5 17.7 51.6 51.3 of which: India 53.3 11.7 15.0 22.6 of which: Nigeria 45.4 45.9 12.8 4.9 Upper middle income 33.6 5.5 9.4 30.3 of which: China 11.9 5.9 3.4 10.0 High-income 0.7 0.8 0.2 4.2 Total 355.5 17.5 100.0 100.0 October 2020 6 Table 5: Children in monetary poverty at $3.20 PPP (LMIC) and $5.50 PPP (UMIC) lines Extreme poor Headcount Share of extreme Share of (millions) poverty rate (%) poor (%) population (%) $3.20 PPP (LMIC) line Children 0-17 840.8 41.5 44.3 31.1 Children 0-4 242.2 44.7 12.8 8.3 Children 5-9 260.7 44.1 13.7 9.1 Children 10-14 227.7 39.9 12.0 8.8 Children 15-17 110.2 34.1 5.8 5.0 Adults (18 or more) 1056.1 23.5 55.7 68.9 Adults 18-59 890.7 24.4 47.0 56.0 Adults 60 or more 165.4 19.7 8.7 12.9 Total 1896.9 29.1 100.0 100.0 $5.50 PPP (UMIC) line Children 0-17 1350.6 66.7 39.7 31.1 Children 0-4 375.8 69.3 11.0 8.3 Children 5-9 405.0 68.5 11.9 9.1 Children 10-14 373.7 65.6 11.0 8.8 Children 15-17 196.2 60.8 5.8 5.0 Adults (18 or more) 2053.4 45.8 60.3 68.9 Adults 18-59 1728.8 47.4 50.8 56.0 Adults 60 or more 324.6 38.7 9.5 12.9 Total 3404.0 52.3 100.0 100.0 Table 6: Children in monetary poverty in 2017 at the $1.90 line in 2011 PPP in fragile countries GMD sample Extreme poor Headcount Share of extreme Share of (millions) poverty rate (%) poor (%) population (%) Non-fragile states 270.5 14.8 76.1 89.9 Fragile states 85.1 41.6 23.9 10.1 Total 355.5 17.5 100.0 100.0 Table 7: Children in monetary poverty in 2017 at the $1.90 line in 2011 PPP by gender Gender Extreme poor Headcount Share of extreme Share of (millions) poverty rate (%) poor (%) population (%) Female children 173.6 17.7 24.5 15.0 Male children 182.0 17.4 25.6 16.1 Female adults 185.5 8.1 26.1 35.0 Male adults 168.6 7.6 23.8 33.9 Total 709.6 10.9 100.0 100.0 October 2020 7 Table 8: Children in monetary poverty in 2017 at the $1.90 line in 2011 PPP by rural/urban location Location Extreme poor Headcount Share of extreme Share of (millions) poverty rate (%) poor (%) population (%) Rural 291.8 24.5 82.4 60.1 Urban 62.3 7.9 17.6 39.9 Total 354.1 17.8 100.0 100.0 Table 9: Children in monetary poverty in 2017 at the $1.90 line in 2011 PPP by household size Household size Extreme poor Headcount Share of extreme Share of (millions) poverty rate (%) poor (%) population (%) Three or less 14.4 6.0 4.1 11.8 Four 30.1 8.9 8.5 16.8 Five 43.8 14.4 12.3 14.9 Six 50.1 20.3 14.1 12.2 Seven 44.3 23.8 12.5 9.2 Eight 39.2 25.0 11.0 7.8 Nine 31.1 23.7 8.7 6.5 Ten or more 102.6 24.3 28.8 20.9 Total 355.5 17.5 100.0 100.0 Table 10: Children in monetary poverty in 2017 at the $1.90 line in 2011 PPP by gender of household head Gender of head Extreme poor Headcount Share of extreme Share of (millions) poverty rate (%) poor (%) population (%) Male head 235.0 17.7 70.7 78.0 Female head 97.3 25.9 29.3 22.0 Total 332.3 19.5 100.0 100.0 Table 11: Children in monetary poverty in 2017 at the $1.90 line in 2011 PPP by education of household head Education of head Extreme poor Headcount Share of extreme Share of (millions) poverty rate (%) poor (%) population (%) No education 81.5 34.6 38.8 21.7 Primary 83.7 23.2 39.8 33.2 Secondary 41.0 11.7 19.5 32.2 Tertiary 3.8 2.7 1.8 12.9 Total 210.0 19.4 100.0 100.0 October 2020 8 Table 12: Children in monetary poverty in 2017 at the $1.90 line in 2011 PPP by industry of work of household head Industry of head Extreme poor Headcount Share of extreme Share of (millions) poverty rate (%) poor (%) population (%) Agriculture 100.4 33.7 71.3 39.5 Industry 13.0 9.2 9.2 18.9 Services 19.1 8.4 13.6 30.4 Other 8.4 9.9 5.9 11.2 Total 140.9 18.7 100.0 100.0 Figure 1: Share of children that are extremely poor, moderately poor, and non-poor, by country for 2017 Sources: Global Monitoring Database and PovcalNet. Notes: Extreme poverty is defined as household per capita income or consumption less than $1.90. Near-poverty is defined as those between $1.90 and $3.10, and non-poor is defined as those living on $3.10 or more per day. October 2020 9 Table 13: Percent of children living in monetary poverty in 2017 Country Poverty line in 2011 $ PPP Country Poverty line in 2011 $ PPP $1.90 $3.20 $5.50 $1.90 $3.20 $5.50 Angola 50.2 73.0 89.7 Iraq 2.2 18.5 59.7 Albania 3.1 15.3 49.4 Jordan 0.4 4.4 31.8 Argentina 1.8 6.0 16.8 Kazakhstan 0.1 0.7 12.4 Armenia 3.2 20.2 62.5 Kenya 41.5 72.9 92.2 Azerbaijan 0.0 0.0 0.0 Kyrgyz Republic 1.4 20.7 71.4 Burundi 81.2 94.2 98.6 Kiribati 12.5 34.4 68.9 Benin 52.1 78.2 92.7 Lao PDR 12.7 45.3 80.2 Burkina Faso 42.1 77.7 93.8 Lebanon 0.0 0.2 2.9 Bangladesh 12.5 51.0 84.5 Liberia 45.5 77.6 94.9 Bulgaria 3.3 7.3 16.1 Sri Lanka 1.1 12.4 45.6 Bosnia and Herzegovina 0.1 0.6 4.2 Lesotho 31.8 56.1 79.7 Belarus 0.0 0.0 1.0 Morocco 1.0 7.9 33.2 Belize 16.6 33.8 61.0 Moldova 0.0 2.5 25.7 Bolivia 7.0 15.2 31.5 Madagascar 82.9 93.9 98.5 Brazil 8.1 16.7 34.8 Maldives 0.0 0.7 7.8 Bhutan 1.9 13.8 42.8 Mexico 2.7 10.1 33.3 Botswana 19.9 47.3 71.1 North Macedonia 7.2 15.9 30.7 Central African Republic 76.7 89.6 95.8 Mali 45.3 77.8 94.8 China 5.9 20.6 46.9 Myanmar 6.4 30.3 68.7 Cote d'Ivoire 29.8 61.9 86.9 Montenegro 1.9 10.9 26.3 Cameroon 27.2 50.5 74.8 Mongolia 0.7 8.8 38.8 Congo, Dem Rep 76.6 91.9 98.2 Mozambique 66.0 84.7 93.9 Congo, Rep 45.8 70.3 87.3 Mauritania 7.5 29.3 66.5 Colombia 6.7 17.3 40.9 Malawi 74.9 92.2 98.0 Comoros 22.1 44.8 68.9 Malaysia 0.0 0.2 3.4 Cabo Verde 4.1 17.3 45.0 Namibia 18.7 38.4 61.4 Costa Rica 3.0 7.1 20.3 Niger 47.5 78.9 94.8 Djibouti 21.9 46.7 78.1 Nigeria 45.9 78.3 95.5 Dominican Republic 1.0 5.6 25.7 Nicaragua 2.2 10.8 36.6 Ecuador 4.9 14.7 34.5 Nepal 8.7 43.8 79.7 Egypt, Arab Rep 5.8 39.4 84.0 Pakistan 2.4 31.5 75.1 Ethiopia 26.1 64.9 91.9 Peru 4.5 13.3 31.8 Fiji 0.9 11.1 46.9 Philippines 7.3 30.8 63.2 Micronesia, Fed Sts 16.8 42.5 72.8 Papua New Guinea 28.2 52.8 79.9 Gabon 4.6 14.9 40.5 Paraguay 2.7 9.5 25.0 Georgia 7.9 24.6 55.6 West Bank and Gaza 1.4 7.4 29.8 Ghana 15.4 34.3 62.7 Russian Federation 0.1 0.5 4.3 Guinea 26.6 62.1 89.3 Rwanda 59.9 83.7 94.0 Gambia, The 11.8 41.9 77.0 Sudan 9.9 32.1 66.3 Guinea-Bissau 65.1 84.0 92.9 Senegal 34.1 64.6 87.9 Guatemala 9.2 27.0 53.6 Solomon Islands 28.7 64.1 88.0 Honduras 21.6 38.1 60.6 Sierra Leone 46.1 79.9 95.1 Haiti 30.7 58.8 85.0 El Salvador 2.3 11.9 36.8 Indonesia 6.7 33.8 66.5 Serbia 0.1 1.8 11.3 India 11.7 49.9 84.1 South Sudan 86.3 95.9 99.4 Iran, Islamic Rep 0.6 4.7 18.7 Sao Tome and Principe 37.8 68.5 89.4 October 2020 10 Appendix Table 13: Percent of children living in monetary poverty in 2017 (continued) Country Poverty line in 2011 $ PPP Country Poverty line in 2011 $ PPP $1.90 $3.20 $5.50 $1.90 $3.20 $5.50 Eswatini 34.5 60.4 79.3 Tanzania 57.5 83.3 95.2 Syrian Arab Republic 1.6 15.5 50.8 Uganda 47.6 76.4 92.1 Chad 43.3 71.0 89.5 Uzbekistan 68.6 90.4 97.7 Togo 52.4 77.4 92.8 Venezuela, RB 11.7 22.3 44.9 Thailand 0.1 0.9 12.2 Vietnam 2.8 11.0 32.5 Tajikistan 3.7 17.4 50.0 Vanuatu 17.3 46.8 78.9 Timor-Leste 28.0 74.7 95.3 Samoa 0.8 10.3 39.7 Tonga 1.0 9.8 34.6 Kosovo 0.3 4.4 28.1 Tunisia 0.5 4.9 23.5 Yemen, Rep 56.6 84.2 95.3 Turkey 0.2 2.8 16.0 South Africa 26.2 49.0 68.9 Tuvalu 0.5 11.7 39.3 Zambia 62.3 78.8 90.3 Sources: Global Monitoring Database and PovcalNet. October 2020 11