Poverty Vulnerability: The Role of Poverty Lines in the Post-Pandemic Era

Abstract

This paper introduces the results of a novel methodology to estimate country-specific macro-poverty vulnerability. The new poverty vulnerability risk measure considers historical information, statistical significances, poverty lines, and forecasting horizons to proxy exposure to poverty. The application uses aggregated household data and macroeconomic information of 154 countries comprising 97% of the world population. Using the absolute poverty line of US$1.90, a COVID-19 pandemic counterfactual shows that, by 2021, the global expected number of people vulnerable to income impoverishment increased from 205 to 245 million people. Likewise, the poverty level rises from a baseline of 632 to a COVID-19 median counterfactual of 748 million people in 2021. Alternative poverty lines studied in the literature also indicate negative changes in macro-vulnerability performances and poverty levels across 2021–2030.