Interrelations between Poverty and International Trade

Poverty is a chronic phenomenon that affects a large proportion of the global population; addressing it is a huge task. Using input-output analysis, we calculate the poverty footprint (PF) of nations associated with their... [ view full abstract ]

Poverty is a chronic phenomenon that affects a large proportion of the global population; addressing it is a huge task. Using input-output analysis, we calculate the poverty footprint (PF) of nations associated with their imports. The PF includes all workers working in global supply chains who are living below the international poverty line (i.e. workers working in export-oriented products who earned less than $1.25 a day; the poverty line reflects the minimum income or consumption required to meet basic human needs). Our results reveal the extent of the PF associated with exported products worldwide. Japan, the US and the European Union have the highest PF. About 70 % of total PF cases arise from the agriculture sector.

We use input-output tables that track all domestic and international monetary transactions. In addition, we include two physical accounts that trace the number of full-time equivalent workers and the income and salary paid to those workers per sector per country.

The results are important for organisations such as the World Bank as it develops strategies to decrease poverty by 2030, Sustainable Development Goals SDGs where ending poverty by 2030 is the first goal, and for Oxfam’s work to live in a world without poverty.