Theories Of Poverty Pdf

Most theories used to explain poverty focus on able-bodied, non-elderly adults, whose potential for escaping poverty rests on their ability to work enough hours at a sufficiently high wage rate. Development plays a central role to poverty reduction in third world countries. Some theories on poverty in the developing world focus on cultural characteristics as a retardant of further development. Theories of poverty Classical and neoclassical Classical traditions view individuals as largely responsible for their own destiny, choosing in effect to become poor e.

Economic theories of poverty

Stanford University Press, pp. As a result, these women and minorities may have lower earnings and may be more likely to be in poverty. The most common line of thought within the U. On the other hand, new-Keynesians are in line with neoclassical economists in their belief that overall growth in income is ultimately the most effective element in poverty removal.

Theories on the causes of poverty are the foundation upon which poverty reduction strategies are based. Development economics Economic theories Research on poverty Social theories. If there is not a complete theory of poverty, are there theories that can be used to explain some aspects of poverty? Furthermore, respiratory system pdf notes economics by its nature leaves out important aspects of the nature and causes of poverty.

The United Nations extends the concept of poverty to include lack of political participation and discrimination. Thus, it can be said, that one's aspirations are influenced by one's environment. In the same way, poverty, according to Green, is viewed as an object in which all social relations and persons involved are obscured. The factors causing poverty and suffering. They help in understanding the precursors of poverty and its persistence over time.

Anti-poverty proposals in this vein include minimum wages and anti-discrimination laws. An advantage of the permanent income and life-cycle hypotheses, over the human capital theory, is that they incorporate both earned and unearned income. Some authors feel that the national mindset itself plays a role in the ability for a country to develop and to thus reduce poverty. Excessive inflation, high sovereign debt and asset bubbles are other macroeconomic factors, besides weak aggregate demand, believed to cause poverty.

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The environment of poverty is one marked with unstable conditions and a lack of capital both social and economical which together create the vulnerability characteristic of poverty. Non-earnings income and family composition are other important determinants that human capital theory does not shed light on. This is often lacking in more mainstream economic frameworks, except when they e.

They also highlight the influence of incentives on individual behaviour as well as the relationship between productivity and income. This thought pattern stems from the idea of meritocracy and its entrenchment within U. Transition Events in the Dynamics of Poverty. Thus, the capacity to aspire requires practice, and, as Chakravarti argues, when a capacity or decision making process is not refined through practice it falters and often fails. Supposed traits range from personality characteristics, such as laziness, to educational levels.

Human capital theory is a theory of earnings, one of the major determinants of poverty. Poverty is considered largely as involuntary and caused by unemployment. Other industrialized nations devote more resources to assisting the poor than the U.

Aspirations are formed through social life and its interactions. Earnings then increase rapidly with age as new skills are acquired. Investments in education and training entail costs both in the form of direct expenses e. This review of the literature indicates this is still the case. Underprivileged area score Department of Environment Index.

II Theories Used to Explain Poverty

Through collaborative projects, the poor are able to expand their aspiration level above and beyond tomorrow's meal to the cultivation of skills and the entrance into the larger market. Lindsay focuses more on economic aspects such as the form of capital focused upon and market characteristics.

These decisions, whether they are favorable to economic development or not, are made within the context of culture. As discussed below, earnings are only one of the main determinants of poverty. Grondona goes on to identify twenty cultural factors on which the two value systems stand in opposition. Still other theories highlight the role that character and opportunity play in poverty.

Theories of poverty

Lillard and Willis propose the components-of-variance method as a link between poverty data and the life cycle framework of these hypotheses. With these theories in mind, we now turn to findings in the poverty transitions literature. Meritocracy, according to Katherine S. Rank, Yoon, and Hirschl present a contrary argument to the idea that personal failings are the cause of poverty.

Malnutrition Priority review voucher. Social exclusion and social capital theories recognise the role of social as well as economic factors. In development literature, poverty becomes something to be eradicated, or, attacked.

Finally, Stace Lindsay claims the differences between development-prone and development-resistant nations is attributed to mental models which, like values, influence the decisions humans make. The first is a failure of the job market to provide a proper number of jobs which pay enough to keep families out of poverty. When a negative view of poverty as an animate object is fostered, it can often lead to an extension of negativity to those who are experiencing it. These elements can be part of the circumstances that qualify people as poor in broader delineations of poverty. Unlike the classical approach, unemployment, viewed as a major cause of poverty, is largely seen as involuntary and in need of government intervention to combat it.

Among recent economists, Sen is noteworthy in looking beyond narrow monetary- based measures of poverty, while Townsend highlighted the variety of resources needed to escape poverty. While in developed nations poverty is often seen as either a personal or a structural defect, in developing nations the issue of poverty is more profound due to the lack of governmental funds. People who expect to work less in the labor market and have fewer labor market opportunities, such as women or minorities, are less likely to invest in human capital.

Nevertheless, adequacy of income remains a key factor. The dual labor market theory is an example. Despite this range, it is always viewed as the individual's personal failure not to climb out of poverty.

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Theories of poverty

Like Grondona's value systems, these mental models which dictate a nations stance toward development and hence its ability to deal with poverty. Rank, Yoon and Hirschl point to the minimal amount of social safety nets found within the U. Both classical and neoclassical approaches overemphasise monetary aspects, the individual as opposed to the group, and a limited role for government. People also seek autonomy, freedom, status, political influence, fairness, justice, dignity and community, for example, which are often excluded from the economic calculus. From Wikipedia, the free encyclopedia.

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This in turn can lead to justification of inequalities through the idea of the deserving poor. Definitions of poverty adopted by preth century economists already distinguished the concepts of relative and absolute poverty.

Poverty absorbs people into itself and the people, in turn, become a part of poverty, devoid of their human characteristics. University of California Press. This review presents a brief description of human capital theory and other relevant theories, including the permanent income hypothesis, culture of poverty theory, and dual labor market theory. On the other hand, the poor's horizon of aspiration is much closer and less steady than that of the elite. Maia Green explains that modern development literature tends to view poverty as agency filled.

Human capital theory is one example. In the same book, Stace Lindsay's chapter claims the decisions individuals make are a result of mental models. The specific ways in which the poor and poverty are recognized frame them in a negative light. Religion, value of work, overall justice and time orientation are included in his list, but Harrison also adds frugality and community as important factors.