Incidence, Profile and Economic Determinants of Poverty in Pakistan: HIES 2005-06

Abstract

This study estimates the incidence, profile and economic determinants of poverty in Pakistan using the HIES data 2005-06. The results show that headcount ratio was about 23 percent in Pakistan. Poverty incidence was more than double in rural area as compared to urban area. Decomposition of poverty into socio-economic characteristics depicts that poverty is higher in those households whose heads are illiterate or have never attended school. It decreases as the level of education increases. It is positively related with the dependency ratio. It is higher in those households who have no access to basic facilities-electricity, gas and telephone. It is the highest in those households whose head’s employment status, sector and occupation is sharecropper, construction and elementary, respectively. Household size is higher in poor families. The results of OLS multiple regression model depict that the poverty incidence is inversely related with age, education and owned land; while it is positively associated with household size. Households who receive foreign remittances or have sewing machine or live stock experience less poverty incidence than those who do not receive or have. At a policy level it is suggested that more investment and development should be focused in agro-based industries. Live stock development can give impetus to the poverty reduction derive. Free education for those who are unable to afford the expenses, with special attention to vocational education should be provided. Broad-based overseas employment strategy should be designed. Family planning should be promoted especially in poor families. Land reforms should be implemented in letter and spirit. Key words: Poverty incidence; Dependency ratio; Education; Foreign remittances; Sewing machine; Employment sector; Occupation; Employment status; Pakistan