4.2 Structural Trap: Where Vulnerabilities Intersect Poverty deepens sharply where multiple vulnerabilities coincide. Low income, insecure employment and limited education do not operate independently: they form interlocking constraints that reduce a household's capacity to invest, diversify and recover, producing a structural trap that persists even in the absence of acute shocks. Income as the foundation of vulnerability Income-poor households are concentrated in the upper-right quadrant Income growth can reduce poverty, but of Figure 7, combining high poverty escaping the structural poverty trap requires incidence with deep overlapping deprivations. Households in Q1 record improvements in health, education and living an MPI headcount of 52.2 percent and a standards as well. score of 0.255. Poverty declines steadily across quintiles, reaching an MPI score of 0.067 in Q5. While poverty headcount declines steadily, MPI intensity is very close for Q3 to Q5. The relationship between income and multidimensional poverty is non-linear and follows an S-shaped curve commonly observed in poverty transitions. Figure 8 sheds light on this pattern. At very low income levels, marginal increases in income translate into only modest reductions in multidimensional poverty, as households remain constrained by structural deprivations (e.g., poor access to services, weak assets, limited resilience). As income rises into a middle range, the curve steepens sharply. In this transformative middle the incremental gains in income enable households to overcome key thresholds, such as securing stable food consumption, accessing basic services, or investing in productive assets. In this range, income support generates the largest marginal reductions in poverty risk. However, this segment is also characterized by fragility. Households have partially escaped deprivation but lack sufficient buffers, making them highly vulnerable to shocks and at risk of slipping back into poverty. At higher income levels, the curve flattens again, as additional income yields diminishing reductions in multidimensional poverty once core deprivations have already been addressed. Figure 8 illustrates why income growth alone is insufficient at the bottom of the distribution: the curve is flat and high at low income levels, meaning that initial income gains, from extreme to merely low income, barely shift the probability of being MPI-poor, because housing, sanitation and health access deficits are not directly resolved through marginal income increases. The probability of being MPIpoor falls steeply only in the middle income range, before flattening again at higher income levels, where remaining poverty is driven by structural deficits in health, education and living conditions that income growth alone does not resolve. This pattern is consistent with Figure 7: deprivation intensity falls more noticeably from Q2 to Q3 than within the bottom two quintiles, indicating that reaching a moderate income level is where income growth starts to translate into reduced depth of deprivation, not only reduced headcount. 30 LAYERS OF DEP RIVATION : Mu ltid im e n s io n a l Pov er t y i n M y a n m a r