Global multidimensional poverty and COVID-19: A decade of progress at risk?

Abstract

According to the global Multidimensional Poverty Index (MPI), an internationally comparable measure, poverty in developing countries has fallen substantially over the last 15 years. The COVID-19 pandemic and associated economic contraction are negatively impacting multiple dimensions of poverty and jeopardising this progress. This paper uses recent assessments of food insecurity and school closures made by UN agencies to inform microsimulations of potential short-term impacts of the pandemic under alternative scenarios. These simulations use the nationally representative datasets underlying the 2020 update of the global MPI. Because these datasets were collected in various years before the pandemic, we develop models to translate the simulated impacts to 2020. Our approach accounts for the country-specific joint distribution of deprivations in the simulations, recent poverty reduction trends, and resulting differences in the responsiveness of the global MPI to the scenarios. Aggregating results across 70 countries that account for 89% of the global poor according to the 2020 global MPI, we find that the potential setback to multidimensional poverty reduction is between 3.6 and 9.9 years under the alternative scenarios. We argue that the extent to which such disruptions result in persistent increases of poverty and deprivations may be attenuated by appropriate policy responses.