Poverty Trap

Poverty Trap
A mechanism which makes it very difficult for people to escape poverty. A poverty trap is created when an economic system requires a significant amount of various forms of capital in order to earn enough to escape poverty. When individuals lack this capital, they may also find it difficult to acquire it, creating a self-reinforcing cycle of poverty.

In order to escape the poverty trap, it is argued that individuals in poverty must be given sufficient aid so that they can acquire the critical mass of capital necessary to raise themselves out of poverty. This theory of poverty helps to explain why certain aid programs which do not provide a high enough level of support may be ineffective at raising individuals from poverty. If those in poverty do not acquire the critical mass of capital, then they will simply remain dependent on aid indefinitely and regress if aid is ended.


Investment dictionary. . 2012.

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  • Poverty trap — – poverty trap is a scenario where people experience poverty due to circumstances beyond their control. The trap becomes cyclical and begins to reinforce itself if steps are not taken to break the cycle. Depending upon a person’s origin of birth …   Wikipedia

  • poverty trap — poverty traps N COUNT If someone is in a poverty trap, they are very poor but cannot improve their income because the money they get from the government decreases as the money they earn increases …   English dictionary

  • poverty trap — poverty ,trap noun count a situation in which someone remains poor because they cannot get a job that will pay them more money than they get from the government …   Usage of the words and phrases in modern English

  • poverty trap — ► NOUN Brit. ▪ a situation in which an increase in someone s income is offset by a consequent loss of state benefits …   English terms dictionary

  • poverty trap — noun a situation in which an increase in income results in a loss of benefits so that you are no better off • Regions: ↑United Kingdom, ↑UK, ↑U.K., ↑Britain, ↑United Kingdom of Great Britain and Northern Ireland, ↑Great Britain • Hypernyms: ↑ …   Useful english dictionary

  • poverty trap — UK / US noun [countable] Word forms poverty trap : singular poverty trap plural poverty traps a situation in which someone remains poor because they cannot get a job that will pay them more money than they get from the government …   English dictionary

  • poverty trap —    The poverty trap refers to the position when an increase in earnings results in a loss of income tested benefit payments which – combined with liability for income tax and other deductions – means that the recipient is no better off. This… …   Glossary of UK Government and Politics

  • poverty trap — The situation low income individuals or families may face when taking up paid employment or securing higher earnings, if the loss of means tested state welfare benefits and/or new income tax payments are equal to, or even exceed additional… …   Dictionary of sociology

  • poverty trap — /ˈpɒvəti træp/ (say povuhtee trap) noun a state of poverty from which it is difficult to escape because any attempt to improve one s circumstances by seeking employment leaves one worse off than one was when totally dependent on social security,… …  

  • poverty trap — defect in the social system which does not allow the poor to improve their economic situation …   English contemporary dictionary

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