# Introduction

The Sustainable Development Goal (SDG) of ending extreme poverty by 2030 is central to the work of the World Bank Group and UNICEF, recognizing that reducing extreme poverty among children is a crucial element of this goal. This effort requires routine reporting of extreme child poverty to measure progress towards that goal.

In 2016, the World Bank and UNICEF released the first ever global estimates of children living in extreme poverty defined by the international poverty line of $1.90 (2011 PPP) per day (UNICEF and <u>World Bank, 2016). Updated child poverty estimates were published in 2020.</u> With only seven years remaining until 2030, this paper provides the third round of global, regional and national estimates of child poverty according to the recently updated international poverty lines of $2.15 (extreme poverty), $3.65 and $6.85 PPP.<sup>3</sup> These updated estimates provide critical information for the tracking of progress for SDG indicator 1.1.1, namely the _proportion of population below the international poverty line, by sex, age, employment status and geographical location,_ expanding upon the analysis provided in the World Bank ́s biennial flagship report on Poverty and Shared Prosperity.

This paper documents these trends using new poverty lines based on the 2017 round of International Comparison Program (ICP) price data collected to generate estimates of purchasing power parity (PPP). All poverty estimates in this paper use the 2017 PPP-based poverty lines. Specifically, this updated approach changes the specification of the extreme-poverty line from US$1.90 (2011 PPP) to US$2.15 (2017 PPP), as well as the specification of other international poverty lines.

The characteristics of children living in monetary poor households and disaggregates by geographic region, income group, and residence in a fragile or conflict-affected country are described. The profile of extreme poor children is also presented by age group, gender, location and household characteristics, providing useful information for governments and all partners working to improve the lives of the poorest children and their families.

# Extreme child poverty trends

The number of children living in extreme poverty decreased by an estimated 63.3 million between 2013 and 2019, from 383 million to 319 million.<sup>4</sup> A slow decrease between 2013 and 2016 in the absolute numbers of children in poverty is largely explained by rapid population growth in Sub-Saharan Africa.

Poverty estimates for 2020, 2021 and 2022 are “nowcasted”—that is, gross domestic product (GDP) growth rates have been used to forecast household incomes, assuming all households experience equal growth in percentage terms in per capita consumption or income.<sup>5</sup> Nowcast estimates show an increase in extreme child poverty in 2020 at the height of the pandemic, whereas poverty reduction resumed in 3 Although the analysis covers child poverty based on all three international poverty lines, that is extreme poverty ($2.15, 2017 PPP) and the higher poverty lines of $3.65 and $6.85, often referred to as lower middle income and upper middle income international poverty lines - the key focus of the trend analysis and the profiling is on extreme child poverty ($2.15).

4 Estimated trends from 2013 to 2018 are based on back casted projections. These are obtained by scaling the distribution of per capita income or consumption by the amount of per capita GDP growth, applied to the latest available survey for each country.

5 Household per capita consumption or income is multiplied by the growth rate of per capita GDP to shift the distribution forwards and backwards, under the assumption that the growth rate in per capita GDP is fully passed through to income or consumption. This follows the methodology used in World Bank (2022) for 2021 and 2022, but not for 2020. Further information can be found in Box 1.3 in World Bank (2022).

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