4.9.1—Poverty traps and poverty cycles
- Syllabus
- First assessment 2022
- Objective
- 4.9.1
- Level
- HL
Poverty traps can reinforce low income over time
Poverty traps can reinforce low income over time.
Low income can limit nutrition, education, credit and investment, which then reduces future productivity; the loop is a mechanism, not a label.
Example
A household without collateral may borrow only at high cost, underinvest in irrigation and remain exposed to the same low harvest next season.
Trace the starting constraint, the feedback and the condition that could break the cycle.
A poverty trap is not inevitable for every poor household; institutions and shocks can change the pathway.