What Would it Cost to End Extreme Poverty?

Roshni Sahoo, Joshua Blumenstock, Paul Niehaus, Leo Selker and Stefan Wager

No 34583, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: H53 I38 O20 (search for similar items in EconPapers)
Date: 2025-12
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