The Economics of Poverty

Blank (2003) identifies six perspectives that economists and policymakers use to understand the causes of poverty. They include issues of economic underdevelopment, human capital, contradictions in capitalism, structural causes, characteristics of the poor, and the incentive effect of welfare programs. This analysis uses Blank's framework to identify major economic theories and related recent research (1990-2005) to explain poverty. While each of the six perspectives provides explanations about the nature of poverty, the strongest factor relates to race. The analysis concludes with implications for practice.