How Much Money Would It Cost To End Global Poverty?

Brief Summary

Ending poverty costs about the same amount of money as other things the world spends on, which are arguably less important than ending poverty. For example alcoholic beverages.

Ending extreme poverty across the globe would require about $318 billion each year, which is roughly 0.3% of total global economic output, andfar less than the 2.2% of global GDP that's spent on alcoholic beverages each year.

This estimate comes from a study carried out by researchers from the University of California, Berkeley (UC Berkeley), Stanford University, and University of California, San Diego (UC San Diego), and published on Monday by the National Bureau of Economic Research.

The recommended method is targeted cash transfers, which are far more cost-effective than universal basic income. And the main challenge is not money, it is political decision making, logistics, and implementation.

This topic can be repurposed to different meanings depending on your perspective. If you're the kind of person that focuses on cost and economic impact, you'll likely redefine your question as, "What would it take financially to house every homeless person worldwide?" Or you'll probably ask, "What would it cost to end global poverty?"

But if you're a type of person that loves to fight inequality and encourage wealth distribution, you'll probably ask if the world could end poverty by redistributing wealth or how a small tax on billionaires could change global poverty.

But the first (or let me say real) question we're supposed to ask should be, "Is Ending Global Poverty Possible in Our Lifetime?" Yes, and some researchers have given answers to that and how to end global poverty.

Researchers from Stanford University and two University of California campuses—UC Berkeley and UC San Diego—published new research on Monday, December 22, 2025, through the National Bureau of Economic Research (NBER).

The study shows that $318 billion per year is the approximate amount needed to eliminate extreme poverty globally. This cost is equal to about 0.3% of the world’s total economic output (global GDP). These figures mean ending the worst forms of poverty is affordable relative to the size of the global economy and much smaller than many global expenditures.

Authors of the paper:

Roshni Sahoo (Stanford University)

Joshua Blumenstock (UC Berkeley)

Paul Niehaus (UC San Diego)

Leo Selker (UC Berkeley)

Stefan Wager (Stanford University)

These researchers examine how much money it would take to bring nearly everyone in the world above the extreme poverty line, defined as living on at least $2.15 per day (in 2017 dollars). In other words, $2.15 per day is the minimum income used globally to define extreme poverty.

However, the researchers analyzed income data from 23 countries and concluded that spending $318 billion per year would be enough to help nearly everyone worldwide earn at least $2.15 a day (measured in 2017 dollars) to live on, which would lift them above the international standard threshold for extreme poverty.

Research Methodology

The researchers used advanced methods involving: household consumption data from 23 countries that together account for about half of the world’s poor, and statistical learning (modern data science techniques) to estimate how to target cash transfers efficiently. Instead of assuming perfect targeting (which is unrealistic), their model incorporates real-world information limits, reflecting how governments actually find and support the poorest people.

—Publised by the National Bureau of Economic Research [NBER].

How the Researchers Say Poverty Can Be Ended

The researchers studied two approaches: the Targeted Cash Transfers approach and the Universal Basic Income (UBI) approach, and compared them directly. The Targeted Cash Transfers method involves sending money only to those living below the poverty line until they reach $2.15 per day.

The Universal Basic Income (UBI), in contrast, gives money to everyone regardless of need. This approach costs about five times more than targeted transfers, which the researchers found to be far more efficient. They concluded that targeted transfers are only about 19% as expensive as UBI and could reduce the extreme poverty rate from roughly 12% of the global population to 1%.

According to the researchers, rich economies like the U.S. can afford this cost without dramatic budget changes because 0.3% of global GDP is relatively small compared to other spending priorities. The research enlightens us more that extreme poverty persists not because it’s too expensive to address, but because political will and institutional barriers have prevented action at scale.

How much is $318 billion in the scheme of things? It's a tiny fraction of the world's economic output. That’s about the same amount ($320 billion) that some bigtech companies, including Amazon, Microsoft, Meta, and Alphabet, together plan to spend on AI research and building data centers in 2025, according to a report published by CNBC in the beginning of 2025.

The researchers pointed out that the cost of ending extreme poverty is actually much smaller than the 2.2% of global GDP that is spent annually on alcoholic beverages. They concluded that, from a financial standpoint, wealthy countries could easily fund most or all of these poverty-reduction measures. More broadly, this suggests that ending global poverty would not require more resources than other, arguably less essential, global spending priorities.