The Impact of the Global Economic Crisis on Rural and Urban Poverty Gap
The Impact of the Global Economic Crisis on Rural and Urban Poverty Gap

Summary/Abstract: In this study, we examine the impact of the 2008 Global Crisis on poverty gap across the globe. We look at the populations living on less than $1.25, $2, $2.50, $4, and $5 a day. We find that before the crisis, the poverty gap had been declining especially for the relatively less-poor population (i.e. the population living on less than $4 or $5 a day). This improvement in the poverty gap stopped after the crisis. When we examine the rural poverty gap and the urban poverty gap pre- and post-crisis, we find similar results. During the pre-crisis period, both rural and urban poverty gap had declined, but after the crisis, this improvement stopped. Overall, we suggest policymakers to focus on both rural and urban poverty rates when facing an economic crisis. We also suggest policymakers to focus on protecting the relatively less-poor population (i.e. the population living on less than $4 or $5 a day) since this group is the one that suffers the most due to an economic crisis.

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