Ensuring escapes from poverty are sustained in rural Bangladesh

Research reports and studies
August 2016
Lucy Scott and Vidya Diwakar

Bangladesh has experienced substantial reductions in both extreme poverty and poverty. The proportion of the population living below the national extreme poverty line has reduced from 50% in 1991 to 18% in 2010 while the poverty headcount ratio, using the national poverty line, has reduced from 60% to 32% over the same period. Economic growth, increased non-farm employment (particularly in the ready-made garment industry), international migration and investments to improve human development outcomes have all contributed strongly to this success. However, some households escape poverty only to live at a level just above the poverty line: 19% of the population lives out of poverty, but has a level of consumption less than 1.25 times the national poverty line. They therefore remain vulnerable to slipping into poverty in the event of a shock or stressor, such as an episode of ill health or a flood.

The specific focus of this report is on 'transitory poverty escapes', a term referring to households that successfully escape from poverty only to return to living in it once again. In other words, they become re-impoverished. Analysis of the Chronic Poverty and Long-Term Impact Study for this case study reveals that transitory poverty escapes are a significant phenomenon in rural Bangladesh. In particular, between 1997–2000 and 2010, 10% of all households experienced a transitory poverty escape. Of those households that escaped poverty between 1997–2000 and 2006, around 20% were again living in poverty by 2010.