Development · social
Extreme Poverty
Definition
Extreme poverty denotes living below the World Bank's international poverty line (IPL), a threshold derived from the median of national poverty lines of low-income countries and expressed in purchasing-power-parity terms. Following the Bank's adoption of 2021 PPPs, the line stands at $3.00 per person per day; it replaced the $2.15 line (2017 PPP), which in turn succeeded earlier lines traced back to the original "$1 a day" measure of 1990. Higher lines of $4.20 and $8.30 (2021 PPP) are used as typical thresholds for lower-middle- and upper-middle-income countries. Eradicating extreme poverty by 2030 is the first target of SDG 1.
References
$3.00/day line in 2021 international-$, median-of-low-income-lines method, $4.20/$8.30 higher lines
$2.15/day (2017 PPP) predecessor line, $6.85 upper-middle reference, history from $1/day (1990)
Overview
What it means
The IPL is an absolute floor, not a measure of national poverty: it fixes the real consumption level below which a person anywhere is counted as extremely poor, enabling global counting and trend tracking. Because the line is periodically revised with new PPP data, figures from different vintages ($2. 15 vs $3. 00) are not directly comparable without restated series.
How it is used
Used in SDG monitoring, World Bank poverty measurement, development-finance allocation and evaluation of poverty-reduction programmes.
Why it matters
It is the world's headline deprivation metric, anchoring the 2030 Agenda and concentrating attention on the populations furthest behind.