Causes of poverty: illness

Economic Development – Poverty

5.2 Poverty – Definitions

• Absolute poverty: Living below a minimum level of income or consumption needed to meet basic needs (food, shelter, clothing, health).

  
  Measurement: International benchmark of US $2 a day (or the latest World Bank poverty line) and national poverty lines based on the cost of a basic food basket.

• Relative poverty: Living significantly below the average standard of living in a particular society.

  
  Measurement: Usually defined as households earning less than 60 % of the median (or average) household income in that country.

5.2 Causes of Poverty (Full Syllabus List)

The syllabus requires an illustration for each cause. The examples below are concise and exam‑friendly.

• Unemployment – e.g., seasonal agricultural workers in a rural region have no work during the dry season, leaving families without any income for several months.
• Low wages – e.g., a garment‑factory worker in a developing country earns $1.50 per day, far below the national minimum wage, so even full‑time work cannot cover basic needs.
• Illness – e.g., a family’s main earner contracts malaria, misses 30 days of work and incurs $50 in medical fees, pushing the household into debt.
• Age (very young or elderly) – e.g., children under five cannot work and depend on adult earners; elderly pensioners without a state pension rely on meagre savings.
• Environmental factors – e.g., a community without clean water suffers frequent diarrhoeal disease, leading to medical costs and loss of labour productivity.

Illness as a Cause of Poverty

Illness can be both a cause and a consequence** of poverty, creating a self‑reinforcing cycle.

How Illness Leads to Poverty

• Loss of income: The sick person cannot work, reducing household earnings.
• Direct medical expenses: Payments for doctors, medicines, hospital stays, etc.
• Indirect costs: Transport to health facilities, special diets, and the need for a family member to act as a caregiver.
• Long‑term effects: Chronic or disabling conditions lower future productivity and employment prospects.

Direct and Indirect Economic Impacts

Illustrative Numerical Example

A rural household’s main earner makes \$5 per day. He falls ill for 30 days and incurs \$50 in medical costs.

1. Loss of earnings: \$5 × 30 = \$150
2. Medical expenses: $50
3. Total immediate cost: \$150 + \$50 = $200

If the household’s total savings are \$150, the \$200 shortfall forces them to sell a productive asset (e.g., a goat) or borrow at high interest, deepening poverty.

Why Illness Is More Prevalent in Poor Communities

• Poor housing and inadequate sanitation increase exposure to disease‑causing agents.
• Limited access to clean water and nutritious food weakens immunity.
• Insufficient health services mean delayed or no treatment.
• Low levels of education reduce awareness of preventive measures such as vaccination and hygiene.

Policy Measures to Alleviate Poverty (Full Syllabus View)

Each measure is followed by a brief evaluation (AO3) of its likely effectiveness.

• Economic growth – Expands overall national income and can create jobs.

  
  Evaluation: Growth raises average incomes, but benefits may be uneven; without inclusive policies it can increase inequality.

• Education and training – Improves skills, raising employability and potential wages.

  
  Evaluation: Provides long‑term poverty reduction, yet results are delayed and require substantial public investment.

• Healthcare provision – Reduces income‑loss and cost‑of‑illness effects.

  
  Evaluation: Universal health coverage directly breaks the illness‑poverty cycle, but financing and quality of services can be challenging in low‑income settings.

• State benefits and social safety nets – Cash transfers, unemployment benefits, pensions, and insurance protect vulnerable groups.

  
  Evaluation: Immediate relief and risk‑pooling are effective, yet programmes may be under‑funded or suffer from targeting errors.

• Progressive taxation – Higher tax rates on the rich generate revenue for redistribution while reducing income inequality.

  
  Evaluation: Can fund public services and safety nets, but excessive rates may discourage investment if not carefully designed.

• National Minimum Wage (NMW) – Sets a floor for earnings, preventing extremely low wages.

  
  Evaluation: Protects low‑skill workers, but if set too high it may lead to reduced employment opportunities in the informal sector.

Health‑Focused Policy Examples (Case‑Study Style)

• Universal health coverage (UHC) – Free or heavily subsidised basic health services for all citizens.

  
  Evaluation: Cuts out‑of‑pocket spending, but requires sustainable financing and strong health‑system capacity.

• Community health programmes – Mobile clinics, vaccination drives, and health‑education campaigns.

  
  Evaluation: Improves access in remote areas; effectiveness depends on community participation and regular funding.

• Health‑related safety nets – Cash‑for‑health or health‑insurance schemes that replace lost income during illness.

  
  Evaluation: Directly offsets the income‑loss component of the poverty‑illness cycle, yet administrative costs can be high.

• Water, Sanitation and Hygiene (WASH) projects – Provide clean water and improved sanitation to cut disease incidence.

  
  Evaluation: Preventive impact is large and cost‑effective, but requires ongoing maintenance and behaviour change.

• Nutrition programmes – School meals, food vouchers, and targeted feeding schemes to strengthen immunity.

  
  Evaluation: Reduces vulnerability to illness, especially in children; success hinges on reliable supply chains.

Link to Other Syllabus Areas

• Population: High dependency ratios (many young or elderly) increase the likelihood of age‑related poverty.
• Economic Development: The poverty‑illness cycle hampers productivity, slowing overall economic growth.
• Macro‑economic aims: Reducing poverty contributes to the aims of full employment, price stability (by limiting health‑related demand shocks), and equitable income distribution.

Summary

Illness pushes households into poverty through loss of income, high medical costs, and long‑term productivity loss. The poorest are most vulnerable because of inadequate housing, poor sanitation, limited health‑service access, and low education. Breaking the poverty‑illness cycle requires a mix of health‑focused interventions (UHC, WASH, nutrition) together with broader policies such as education, progressive taxation, a national minimum wage, and robust social‑safety nets.