In economics, a cycle of poverty or poverty trap is caused by self-reinforcing mechanisms that cause poverty, once it exists, to persist unless there is outside intervention. It can persist across generations, and when applied to developing countries, is also known as a development trap.
Families trapped in the cycle of poverty have few to no resources. There are many self-reinforcing disadvantages that make it virtually impossible for individuals to break the cycle. This occurs when poor people do not have the resources necessary to escape poverty, such as financial capital, education, or connections. Impoverished individuals do not have access to economic and social resources as a result of their poverty. This lack may increase their poverty. This could mean that the poor remain poor throughout their lives.
Controversial educational psychologist Ruby K. Payne, author of A Framework for Understanding Poverty, distinguishes between situational poverty, which can generally be traced to a specific incident within the lifetimes of the person or family members in poverty, and generational poverty, which is a cycle that passes from generation to generation, and goes on to argue that generational poverty has its own distinct culture and belief patterns.
Measures of social mobility examine how frequently poor people become wealthier, and how often children are wealthier or achieve higher income than their parents.
According to the United States Census, in 2012 people aged 18–64 living in poverty in the country gave the reason they did not work, by category:
31% - Ill or disabled
26% - Home or family reasons
21% - School or other
13% - Cannot find work
8% - Retired early
Some activities can also cost poor people more than wealthier people. For example, if unable to afford the first month's rent and security deposit for a typical apartment lease, people sometimes must live in a hotel or motel at a higher daily rate. If unable to afford an apartment with a refrigerator, kitchen, and stove, people may need to spend more on prepared meals than if they could cook for themselves and store leftovers.
