Revisiting Global Poverty Reduction: Public Goods and the World Distribution of Income, 1980-2022

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This article constructs new estimates of global poverty that incorporate the consumption of public services. Combining data from multiple sources, I build a novel historical database on the value and progressivity of public education, healthcare, and other in-kind transfers received worldwide since 1980. Public goods are large and have considerably grown: they represent 30% of global GDP and have been a major driver of inclusive growth. The consumption of public goods accounts for about 20% of global poverty reduction since 1980. Total government redistribution, including cash and in-kind transfers, accounts for 30%. In a companion paper, I incorporate in this analysis the causal impact of education on pretax incomes. Combining direct redistribution and indirect investment benefits from education brings the total contribution of public policies to global poverty reduction to 50-80% or more.