What is a poverty trap?

Poverty trap is a cycle that keeps people in a state of poverty, even if they try to raise. A number of factors contribute to the development of such cycles and economists and have developed a number of theories to deal with poverty -based traps created by social and economic policy. This problem is particularly urgent concerns in developing countries, where the level of poverty is often very high and the organization helps to improve the conditions for people living in poverty and at the same time allow families to get out of poverty. Government assistance is often structured to allow people to survive at a marginal level, partly because they do not keep up with inflation, as well as with the aim of motivating performing benefits. A person in poverty will be entitled to social services, but if you try to get a job, the benefits will be in proportion to the income and leaving the person to the same position. Individuals who have enough work to fully support themselves can find themselves paying a high marginal tax rate, which will return them back there wheree started.

Politics is not the only way to create a trap for poverty. Nations with environmental problems and serious political instability may also be captured by circumstances in poverty. If they try to escape these circumstances, they will encounter another set of problems associated with the unrest in their nations and can eventually return to the place where they started.

People caught in poverty trap tend to give up after a certain point. After trying to escape the traps of poverty and find themselves in the same position, they return to a level where they can gain government aid, benefits from the organization, and so on. Some critics of testing resources and methods used to provide foreign aids have claimed that these policies must be changed to encourage people to escape from poverty and make less likely that former recipients of such benefits are transported back to poverty and need ZN helpovu.

Modifications means testing standards, changing tax codes, investment in the form of loans to support people trying to open businesses, and providing other forms of assistance to support the development of wealth and additional income, have been designed as ways to solve the problem of poverty trap.