Types of causes of poverty

A. Individual

Poverty is explained by individual circumstances and/or characterstics of poor people. Some examples are:
• amount of education, skill, experience, intelligence.
• health, handicaps, age.
• work orientation, time horizon, culture of poverty.
• discrimination, together with race, sex, etc.


B. Aggregate

There are two types of aggregate poverty theory: case and generic. There is no agreement on which is the correct explanation of most poverty.

1. Case. Add up all poverty explained by individual theories, and that is equal to total or aggregate poverty. In other words, according to case theories of poverty, individual and aggregate explanations are really the same. According to these theories, aggregate poverty is just the sum of individual poverty.

2. Generic. Poverty is explained by general, economy-wide problems, such as
• inadequate non-poverty employment opportunities
• inadequate overall demand (macro problems, macro policy)
• low national income (Less Developed Country)
If generic theories are correct, poverty is caused by one set of forces (general, economy-wide problems) but distributed according to individual theories.