While the world has seen much economic growth and poverty reduction over the last few decades, extreme poverty persists. It is important to understand how households accumulate assets and increase their productivity and earning potential, as well as the conditions under which some individuals, groups, and economies struggle to escape poverty, and when and why adverse shocks have persistent welfare consequences. This introductory chapter introduces an integrative model that frames a range of possible poverty trap mechanisms explored in more detail in the book's other chapters. The model elucidates more commonly discussed poverty trap mechanisms (financial market failures, risk, and undernutrition) as well as their interaction with less frequently discussed mechanisms, including mental health, aspirations, and desires. All these features may lead to endogenous behavioral patterns that in equilibrium lead households not to take actions that would enable them to escape poverty over time. We emphasize how and why these effects can be heterogeneous across household types and economic/policy environments. We also explore the implications for the effectiveness of programs and policies designed to address persistent extreme poverty, such as cash transfers and microfinance.
Chicago Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.
If you think you should have access to this title, please contact your librarian.
To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.