Differential Effects of Human Capital on the Poor and Near-Poor: Evidence of Social Exclusion

Abstract

ABSTRACT This article contributes to the body of knowledge by examining the differential effects of three dimensions of human capital—education, training, and health—on the poor and upper income categories. We tested the effects using binomial and multinomial logistic regression analyses of working age individuals. The study revealed that these human capital variables are strong predictors of poverty in the binomial model but have greater effects on the near-poor than the poor in the multinomial model. This may provide evidence for social exclusion of the poor, due to their structural vulnerability in the labor market. Implications are made for a comprehensive workforce development strategy that combine human capital development and labor market inclusion.