Why Do People Stay Poor?

Clare Balboni, Oriana Bandiera, Robin Burgess, Maitreesh Ghatak and Anton Heil (March 2020)

There are two views as to why people stay poor. The equal opportunity view emphasizes that differences in individual traits like talent or motivation make poor people choose low productivity jobs. The poverty traps view emphasizes that access to opportunities depends on initial wealth and hence poor people have no choice but to work in low productivity jobs.