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Angus Deaton: How Billions Were Lifted from Poverty

Angus Deaton: How Billions Were Lifted from Poverty

Built World

From 80% to 9.9%: The Longest Sustained Improvement Continues Amid New Measurement Standards

June 1st, 2025: World Bank Adopts 2021 PPPs, Revises Poverty Lines

Overview

In 1820, more than 80% of the world's population lived in extreme poverty. By 2019, that figure had fallen to 8.9% at the then-$2.15/day line—a decline of roughly 0.35 percentage points per year sustained across two centuries. In June 2025, the World Bank adopted 2021 purchasing power parities (PPPs), raising the extreme poverty line to $3.00/day; this revised the 2022 rate upward to 10.5% (838 million people) but projects a decline to 9.9% (808 million) by 2025, continuing the historic trend through post-pandemic recovery.

Sub-Saharan Africa now accounts for over three-quarters of the global extreme poor, with population growth outpacing reductions. The UN's SDG 1 goal of ending extreme poverty by 2030 is unattainable under current trends, as only one in five countries is on track to halve national poverty rates. South Asia showed strong recovery, but fragility, conflict, and climate shocks hinder progress elsewhere.

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Key Indicators

80%+
Global poverty rate in 1820
The share of world population living on less than $1.90/day in 1820 prices.
8.9%
Global poverty rate in 2019
Pre-pandemic rate at the $2.15/day (2017 PPP) international poverty line.
800M
People lifted from poverty by China
China contributed roughly three-quarters of the global poverty reduction since 1980.
10.5%
Revised 2022 poverty rate ($3.00/day)
World Bank June 2025 update using 2021 PPPs; 838 million people.
9.9%
Projected 2025 poverty rate ($3.00/day)
808 million people; nowcasted decline from 2022 amid broad country-level recovery.
712M
People in extreme poverty (2022, prior estimate)
Still 23 million more than in 2019 despite partial recovery; superseded by 2025 revision.

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People Involved

Xi Jinping
Xi Jinping
Declared 'complete victory' over poverty in February 2021
 Jim Yong Kim
Jim Yong Kim
Now with Global Infrastructure Partners
 Angus Deaton
Angus Deaton
Nobel laureate, continuing research
 Max Roser
Max Roser
Active researcher at Oxford University
 Norman Borlaug
Norman Borlaug
Deceased (2009)

Organizations Involved

WB
World Bank Group
Multilateral development bank
Primary global authority on poverty measurement

Multilateral development institution that sets the international poverty line and produces global poverty estimates.
United Nations
United Nations
International organization
Sets global development goals including SDG 1 (No Poverty)

Coordinates global poverty reduction efforts through the Millennium and Sustainable Development Goals.
Our World in Data
Our World in Data
Research publication
Primary source for historical poverty statistics

Oxford-based research publication that compiles and visualizes long-run data on global development.

Timeline

  1. World Bank Adopts 2021 PPPs, Revises Poverty Lines

    Methodology

    International extreme poverty line raised from $2.15 to $3.00/day (2021 PPPs); 2022 global rate revised to 10.5% (838M people), projected to fall to 9.9% (808M) by 2025. South Asia drives decline; Sub-Saharan Africa at 45.5% in 2022.

  2. UN SDG Report: 808M in Extreme Poverty by 2025

    Milestone

    UN estimates 9.9% global extreme poverty under new $3.00 line, with three-quarters in Sub-Saharan Africa or fragile states. Only 1 in 5 countries on track to halve national poverty by 2030.

  3. World Bank Updates Poverty Line to $2.15

    Methodology

    International poverty line raised from $1.90 to $2.15/day using 2017 purchasing power parity data.

  4. China Declares Poverty Eliminated

    Announcement

    Xi Jinping declares China has achieved 'complete victory' over absolute poverty by its domestic poverty line.

  5. Global Extreme Poverty Falls Below 9 Percent

    Milestone

    Despite COVID-19's impact pushing rates to 9.7% for 2020, the pre-pandemic achievement of sub-9% poverty marks a 200-year transformation from over 80% in 1820.

  6. Pre-Pandemic Low Point

    Milestone

    Global extreme poverty rate reaches 8.9%—approximately 689 million people. The lowest rate in human history.

  7. Angus Deaton Wins Nobel Prize

    Recognition

    Princeton economist Angus Deaton receives Nobel Prize for work on consumption, poverty measurement, and welfare.

  8. Sustainable Development Goals Adopted

    Policy

    UN adopts SDG 1: end poverty in all its forms everywhere by 2030. Global extreme poverty rate stands at 10%.

  9. World Bank Sets 2030 Poverty Elimination Goal

    Policy

    President Jim Yong Kim announces goal to end extreme poverty by 2030 and boost incomes for the bottom 40%.

  10. MDG Poverty Target Achieved Early

    Milestone

    Global extreme poverty rate falls below half its 1990 level, meeting the MDG target five years ahead of schedule.

  11. Millennium Development Goals Adopted

    Policy

    189 countries commit to halving extreme poverty by 2015. Target 1A: reduce the proportion living on less than $1.25/day by half.

  12. World Bank Establishes Dollar-a-Day Line

    Methodology

    World Bank introduces standardized international poverty measurement at $1/day, enabling global comparisons. 37.8% of world population lives in extreme poverty.

  13. China Begins Economic Reforms

    Policy

    Deng Xiaoping initiates market reforms that will lift 800 million Chinese from poverty over the next four decades.

  14. Green Revolution Begins

    Technology

    High-yield wheat and rice varieties developed by Norman Borlaug spread across Asia, dramatically increasing food production.

  15. Earliest Global Poverty Estimates

    Milestone

    Economic historians Bourguignon and Morrisson estimate 80% of world population lives in extreme poverty, roughly unchanged from prior centuries.

Scenarios

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1

SDG 1 Missed, Progress Resumes Slowly

The 2030 goal of ending extreme poverty is not achieved, with projections showing 8-9% of the world still in poverty. Progress continues but at a slower pace than the 1990-2019 period. Sub-Saharan Africa remains the primary concentration of extreme poverty, accounting for 90% of the global total by 2030. International focus shifts to realistic multi-decade targets.

Discussed by: World Bank, UN Department of Economic and Social Affairs
Consensus —
2

African Growth Breakthrough Accelerates Decline

Sustained economic growth in Sub-Saharan Africa, driven by industrialization, agricultural modernization, or digital services, begins reducing poverty faster than population growth. This would require annual growth rates above 7% sustained for decades—similar to what China achieved from 1980-2010. Current trajectories do not support this scenario, but it remains technically possible.

Discussed by: IMF, African Development Bank, Brookings Institution
Consensus —
3

Climate Shocks Reverse Progress

Climate change-driven agricultural failures, extreme weather events, and displacement push tens of millions back into extreme poverty. The World Bank estimates climate change could push 132 million more people into extreme poverty by 2030. Gains made since 1990 begin eroding in the most climate-vulnerable regions of South Asia and Africa.

Discussed by: World Bank Climate Team, IPCC, Overseas Development Institute
Consensus —
4

Poverty Measurement Paradigm Shifts

The international community moves away from the income-based poverty line toward multidimensional poverty measures that include health, education, and living standards. This reframes the narrative: while income poverty has declined, billions still lack access to basic services. The definition of 'ending poverty' becomes more ambitious.

Discussed by: Angus Deaton, Thomas Pogge, UNDP Multidimensional Poverty Index team
Consensus —

Historical Context

Industrial Revolution (1760-1840)

1760-1840

What Happened

Beginning in Britain, mechanized manufacturing and the factory system replaced agricultural and artisanal economies. Steam power, textile mills, and later railways transformed how goods were produced. GDP per capita in Britain roughly doubled between 1760 and 1860.

Outcome

Short Term

Living standards for workers initially declined or stagnated, with harsh factory conditions and urban poverty. Real improvements for the working class didn't materialize until after 1820-1830.

Long Term

Created the economic model that eventually lifted billions from poverty. Industrialized nations achieved sustained growth that spread—with significant delays—to the rest of the world.

Why It's Relevant Today

The Industrial Revolution marked the inflection point after which poverty began its long decline. The pattern—technology enables productivity gains that eventually raise living standards—repeated with the Green Revolution and China's market reforms.

Green Revolution in Asia (1965-1990)

1965-1990

What Happened

High-yielding wheat and rice varieties, developed by Norman Borlaug and others, spread across India, Pakistan, and Southeast Asia. India's wheat production rose from 10 million to 73 million tons. Asia's grain yields doubled while population grew 60%.

Outcome

Short Term

Averted predicted famines in India and Southeast Asia. Food prices fell and caloric intake increased.

Long Term

Cut Asia's poverty rate in half by the 1990s. However, Sub-Saharan Africa never experienced an equivalent agricultural transformation, contributing to its divergent poverty trajectory.

Why It's Relevant Today

Demonstrates how technology transfer can accelerate poverty reduction when combined with policy support. Africa's absence of a similar revolution helps explain why poverty reduction there has lagged.

China's Market Reforms (1978-2020)

1978-2020

What Happened

Deng Xiaoping's economic reforms introduced market mechanisms to China's planned economy. Special economic zones, agricultural de-collectivization, and later WTO accession transformed China into the world's manufacturing center. 800 million people moved above the poverty line.

Outcome

Short Term

Rural poverty fell rapidly in the 1980s as agricultural reforms took hold. Urban migration accelerated through the 1990s and 2000s.

Long Term

China accounted for three-quarters of global poverty reduction since 1980. Its success dominates global statistics—excluding China, poverty reduction elsewhere was far more modest.

Why It's Relevant Today

China's trajectory shows both the potential and the limitations of the global poverty story. The world's achievement depends heavily on one country's success; replicating it elsewhere has proven difficult.

Sources

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Our World in Data World Bank Blogs World Bank United Nations Wikipedia Nobel Prize United Nations Statistics Division World Bank Our World in Data World Bank United Nations World Bank Blogs World Bank Blogs Our World in Data