Getting out of the poverty trap

The New York Times has an article (paywalled) about the value of social signalling in giving poor people the initiative to get out of poverty, without external assistance. I've often wondered why this model isn't more widely practiced, especially in Australia where Australians living in some Aboriginal communities live in conditions more akin to a third world country, despite attempts by governments of all political colours. Maurcio Lim Miller explains:

When I was running social services, if I didn’t present the charity case, I didn’t get funded. We competed to present the most in need. And families come to see that the more needy you are, the more eligibility you have. So the system asks them to hide their talent and initiative.

In Asia, working overseas (at times illegally) for a few years has been a traditional pathway of getting a head start in a high unemployment world. Once someone knows a friend who did that, they now know, the solution is pretty obvious. This is an example of a feedback loop that families utilise to get themselves out of poverty.

FII, the organisation run by Miller, aggregates and distributes stories of how families found their way out of poverty. It provides a pathway for people to see what is possible. The results, if true, are remarkable. This is a chart of average monthly income for 12 months before and after.

If social signalling truly works, it has the potential of amplifying and complementing the work done by groups such as GenerationOne, who's mission is to end the disparity between Indigenous and non-Indigenous Australians in one generation through employment.