Global megatrends such as income inequality, climate change, demographic shifts, technological progress, and urbanisation are shaping the future of societies. Yet, their quantitative impacts on development are neither well understood nor established.
This paper examines the individual and combined effects of these global forces on poverty, using both cross-section and panel estimation techniques on a global dataset covering the period from 1995 to 2019.
Regarding the direct effects, it finds that inequality, urbanization, and technology are the megatrends with a robust impact on poverty in both the long and medium terms. Demographic shifts and climate change have some impact on poverty, but the results depend on the samples and specifications considered.
Furthermore, the paper finds that in addition to their direct effects, technology, urbanization, and demographic shifts affect poverty through their interactions with income inequality.
Among the controls, per capita income, education, and private credit are significant drivers in the medium term, while per capita income is the only control variable that matters in the long run.
The findings, interpretations and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the United Nations or its officials or Member States. The designations employed and the presentation of material on any map in this work do not imply the expression of any opinion whatsoever on the part of the United Nations concerning the legal status of any country, territory, city, or area or of its authorities, or concerning the delimitation of its frontiers and boundaries. This paper has not been formally edited.
