Poverty trap

A self-reinforcing cycle in which low income or assets restrict access to the resources needed to raise future income, keeping people or communities poor.

Low-level equilibrium trap: A stable economic condition in which low income and low investment sustain one another. It describes the economy-wide feedback that can keep a poor society at low income.
Savings: Income set aside for future use rather than current consumption. Low income leaves little room to save for emergencies or investments.
Conditional cash transfer: A cash benefit provided to households contingent on actions such as school attendance or health visits. It eases budget constraints while encouraging investments in children’s capabilities.
Seasonal hunger: Recurring food shortages during predictable periods when income or food supplies decline. Hunger can weaken health and work capacity, reducing earnings before the next harvest.
Transient poverty: Poverty experienced for a limited period, followed by recovery above the poverty threshold. Unlike a poverty trap, a temporary income shock need not create lasting feedback.
Credit constraint: A limit on borrowing caused by lenders’ risk assessments, collateral requirements, or incomplete information. Without credit, poor households may be unable to finance productive investments.
Investment: The use of resources to create assets or capabilities expected to yield future returns. A shortage of investment can prevent the productivity gains needed to escape poverty.
Unconditional cash transfer: A cash payment made without requiring recipients to meet behavioral conditions. It can help households meet urgent needs, protect assets, and fund productive choices.
Malaria and poverty: The mutually reinforcing relationship between malaria burden and economic deprivation in affected populations. Illness and prevention costs can reduce productivity, while poverty limits access to protection and treatment.
Chronic poverty: Long-lasting poverty that persists over many years or across generations. It is an observed condition that may result from a poverty trap or other persistent disadvantages.

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