Lesson Plan

• Describe the concept of a poverty trap and its link to income, wealth and human capital.
• Explain how low initial wealth, health and education limit investment and perpetuate low wages.
• Analyse at least three policy instruments that can break the poverty trap, evaluating equity and efficiency impacts.
• Apply a simple household optimisation framework to illustrate how transfers shift the budget constraint.
• Critically assess trade‑offs of redistribution policies in terms of equity versus efficiency.

• Projector and screen
• Whiteboard and markers
• Handout summarising the poverty‑trap model and policy table
• Calculator or spreadsheet software
• Printed diagram of human capital vs. wage
• Sticky notes for group brainstorming

Begin with a quick prompt asking why some families remain poor despite hard work, linking to students’ prior knowledge of income inequality. Highlight that today’s success criteria are to explain the poverty‑trap mechanism and evaluate policies that can break it.

1. Do‑now (5') – Students write a brief response to the opening prompt; teacher collects for a quick check.
2. Mini‑lecture (10') – Define income vs. wealth, equity, and introduce the poverty trap with the two‑panel diagram (projector).
3. Model activity (12') – In pairs, use the utility maximisation equation to calculate how a transfer (T) changes consumption (C) and potential investment in human capital (H). Worksheet provided.
4. Policy analysis (15') – Small groups each take one policy instrument (e.g., direct transfers, education subsidies, micro‑credit) and fill a table comparing equity benefits and efficiency costs.
5. Whole‑class discussion (8') – Groups share findings; teacher synthesises the trade‑offs and connects back to the poverty‑trap model.
6. Formative check (5') – Exit ticket: one sentence describing how the assigned policy can move a household out of the low‑return equilibrium.

Recap the key idea that redistribution policies can shift the budget line and raise returns to effort, helping households escape the poverty trap. Collect exit tickets to gauge understanding and assign homework: write a short paragraph evaluating which policy would be most effective in your local community and why.