Poverty is a condition in which people lack the resources, services, or opportunities needed to meet basic needs and participate in society. It includes inadequate income and material deprivation, but also restricted access to education, health, housing, and public services. The United Nations describes poverty as encompassing hunger, social exclusion, and limited participation in decision-making. Definitions differ according to whether they emphasize minimum necessities, living standards within a society, or overlapping disadvantages. (un.org)
Definitions and approaches
Absolute poverty assesses resources against a threshold intended to represent basic needs, such as food, clothing, and shelter. A national poverty line reflects a country's economic and social circumstances. International thresholds support comparisons across countries, but national thresholds are generally more appropriate for designing domestic programs and identifying locally relevant deprivation. (worldbank.org)
Relative poverty identifies people whose resources fall substantially below prevailing living standards. The Organisation for Economic Co-operation and Development commonly measures it using income below half the national median household income. Its income-poverty comparisons use disposable income, with adjustments for household size. Relative poverty therefore concerns people's position within an income distribution, rather than a universal minimum consumption level. (oecd.org)
Poverty and income inequality are related but distinct. Inequality describes differences across the distribution; poverty identifies deprivation against a specified standard. Two countries can have identical poverty rates while their poor populations have very different income levels. Likewise, a headcount alone cannot distinguish people just below a threshold from those far below it. (oecd.org)
Monetary measurement
Monetary poverty estimates typically use household surveys recording income or consumption. Analysts construct a welfare measure, compare it with a poverty line, and aggregate results across individuals. Consumption measurement requires decisions about reporting periods, questionnaire detail, and whether respondents recall expenditure or keep diaries; these choices can affect estimated deprivation. (documents1.worldbank.org)
The poverty headcount ratio is the proportion of people below the selected threshold. The poverty gap index measures the average shortfall from that threshold, expressed as a percentage of the line and counting nonpoor people as having zero shortfall. It captures depth as well as incidence, although it does not provide a complete description of how deprivation is distributed among poor people. (databank.worldbank.org)
In June 2025, the World Bank revised its international extreme-poverty line to $3.00 per person per day in 2021 international dollars, replacing $2.15 in 2017 international dollars. These amounts use purchasing power parity to account for differences in price levels; they are not equivalent to converting local income at market exchange rates. The same revision established reference lines of $4.20 and $8.30 for lower-middle-income and upper-middle-income economies. (worldbank.org)
Under the June 2025 data release, approximately 838 million people were estimated to have lived below the $3.00 line in 2022. The upward revision from earlier estimates reflected new purchasing-power data, revised underlying national thresholds, and updated surveys—not a sudden deterioration occurring when the figures were published. Historical comparisons require consistent thresholds and data methods. (worldbank.org)
Multidimensional deprivation
Multidimensional poverty measures disadvantages that monetary indicators may not reveal. The global Multidimensional Poverty Index, produced by the United Nations Development Programme and the Oxford Poverty and Human Development Initiative, combines ten indicators across health, education, and living standards. These include nutrition, schooling, sanitation, drinking water, electricity, housing, cooking fuel, and assets. A person is classified as multidimensionally poor when their household's weighted deprivation score reaches at least one-third. (hdr.undp.org)
The 2025 index covered 109 countries containing 6.3 billion people and identified approximately 1.1 billion people in acute multidimensional poverty, over half of them children. Its surveys were conducted in different years, so the publication does not represent a simultaneous census of deprivation in 2025. Nor is its total directly interchangeable with an international monetary-poverty estimate: coverage, thresholds, and measured disadvantages differ. (hdr.undp.org)
Processes and unequal exposure
Poverty reflects interacting economic and social conditions. Weak economic growth, limited access to productive employment, and unequal opportunities can constrain household incomes. Access to infrastructure, basic services, and education affects whether people can participate in growth. Armed conflict and major economic shocks can interrupt progress, while high inequality can limit socioeconomic mobility. (worldbank.org)
Climate change introduces additional risks to livelihoods. The 2025 multidimensional-poverty report found that 887 million poor people lived in subnational regions exposed to at least one of four hazards: high heat, drought, flooding, or air pollution. This geographic overlap indicates exposure, rather than proving that a particular hazard caused every observed deprivation. (hdr.undp.org)
Discrimination and social exclusion can also restrict access to work, housing, services, and participation. Poverty therefore has a human-rights dimension alongside its economic dimensions. Disadvantages affecting children's nutrition, schooling, and household security can persist across generations. (un.org)
Institutions and policy responses
Poverty-reduction programs include employment measures, public services, and social protection. Social protection encompasses cash or in-kind assistance, social insurance, pensions, public works, and support during unemployment, disability, or other disruptions. Such systems address immediate deprivation and help households manage risks; their effects depend on design, coverage, financing, and implementation. (worldbank.org)
Goal 1 of the Sustainable Development Goals calls for ending poverty in all its forms. Its targets include reducing nationally defined multidimensional poverty and expanding social-protection coverage. Monitoring these objectives requires distinguishing monetary deprivation, service access, and vulnerability, while documenting survey dates, population coverage, and methodological revisions. (un.org)