In all these cases, the children are penalised for life, as they grow into adulthood lacking skills, often unable to realise their full health potential, and condemned to low productivity and low incomes.
Moreover, poor people who are unable to buy
or invest in modern agricultural inputs (fertilisers, irrigation facilities, improved seeds) because their incomes are too low are forced to overuse their land, thus depleting the soil of essential nutrients, with the result that their children will be forced to work on soils of poorer quality that have lower yields (lower output per unit of land). Once again, poverty is transmitted to the next generation. Similar conclusions hold for any aspect of environmental degradation caused by the survival needs of poor people.
Since poor people cannot make investments because they do not have enough savings, it would help if they could borrow to finance the necessary investments
in human, physical and natural capital, all of which would raise their productivity and increase their incomes. However, banks do not usually lend to poor people, who lack the necessary collateral. Therefore, the poor remain without access to the credit that could help raise them out of their poverty, and poverty is carried into the next generation.