Why do people stay poor? Identifying poverty traps in practice

Understanding what causes poverty is key to eradicating it. Poverty traps have often been indicated as a fundamental reason why many people remain poor. The idea behind poverty traps is that poor people keep engaging in low-earning occupations, not because they lack innate ability, but simply because they lack better opportunities. Although poverty traps represent a central concept in development policy, it is very difficult to identify them empirically. In this webinar, Anton Heil will present a method to identify poverty traps in practice. Using data from a large asset-transfer program, he will demonstrate the existence of poverty traps in rural Bangladesh, where people whose agricultural assets exceed a certain threshold are able to accumulate wealth over the years, while people below the threshold progressively slide into poverty. He will also discuss the profound policy implications of poverty traps, highlighting that big-push, time-limited programmes might be more effective at reducing poverty than continuous consumption-support interventions.

SPEAKER:

Anton Heil is a Research Manager at the Department of Economics at the London School of Economics and a PhD student at the University of California, Berkeley (currently on leave). He has previously worked as a consultant at Innovations for Poverty Action and at the World Bank. Anton holds a BA in Philosophy and Economics from the University of Bayreuth.

Webcast