'poverty-reducing' is a modern English compound formed from 'poverty' + the present participle 'reducing'. 'poverty' originates from Old French, specifically the word 'povreté', ultimately from Latin 'paupertas' and 'pauper' where 'pauper' meant 'poor'. 'reduce' originates from Latin, specifically the word 'reducere', where the prefix 're-' meant 'back' and 'ducere' meant 'to lead'.

'poverty' passed into English via Old French 'povreté' from Latin 'paupertas', becoming Middle English 'poverty'; 'reduce' came from Latin 'reducere' through Old French 'reduire' into Middle and Modern English. The compound form 'poverty-reducing' is a contemporary formation combining the noun and the present participle.

Initially, 'poverty' meant 'the state of being poor' and 'reduce' originally had the sense 'lead back'; over time 'reduce' evolved to mean 'make smaller' or 'bring down', so the compound now means 'causing poverty to decrease'.