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What Would it Cost to End Extreme Poverty?

Author

Listed:
  • Roshni Sahoo
  • Joshua Blumenstock
  • Paul Niehaus
  • Leo Selker
  • Stefan Wager

Abstract

We study poverty minimization via direct transfers, framing this as a statistical learning problem while retaining the information constraints faced by real-world programs. Using nationally representative household consumption surveys from 23 countries that together account for 50% of the world’s poor, we estimate that reducing the poverty rate to 1% (from a baseline of 12% at the time of last survey) would cost $170B nominal per year. This is 5.5 times the corresponding reduction in the aggregate poverty gap, but only 19% of the cost of universal basic income. Extrapolated globally, the results correspond to a cost of (approximately) ending extreme poverty of roughly 0.3% of global GDP.

Suggested Citation

  • Roshni Sahoo & Joshua Blumenstock & Paul Niehaus & Leo Selker & Stefan Wager, 2025. "What Would it Cost to End Extreme Poverty?," NBER Working Papers 34583, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34583
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    More about this item

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General

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