Economics

Poverty Trap

Poverty Trap

Poverty Trap is a mechanism making it very difficult if you are to escape poverty. A poverty trap is created when an financial system requires a significant level of various forms of capital as a way to earn enough to escape poverty. When people lack this funds, they may also battle to acquire it, creating a self-reinforcing cycle regarding poverty. A poverty snare is “any self-reinforcing mechanism which in turn causes poverty to persist.”