Poverty in Karachi: Incidence, Location, Characteristics, and Upward Mobility

Abstract

The paper examines the incidence and spatial distribution of poverty in Karachi, Pakistan. Based on a survey of 6000 households, it locates the clusters of poverty and presents a profile of the poor in the city. Just over one-third of the households in Karachi can be classified as poor, based on an absolute poverty line derived from standard consumption norms. Poverty is concentrated in six geographical clusters, which account for 60 percent of the sample households but 90 percent of the very poor households. Analysis of residential movement is used to derive some indirect evidence of socioeconomic mobility. This suggests that, historically, the incidence of upward mobility amongst the poor in Karachi, based partly on the acquisition of skills and education, has been quite high. Poverty in Karachi has not been endemic as a continuous influx of migrants at the bottom replaced those who moved up the economic ladder. The little evidence of downward mobility also identifies it as a more recent occurrence as compared to upward mobility. Data on education show that generational inequalities in educational attainments across different groups among the poor are not being perpetuated over time. At the same time, an analysis of investment in the education of children suggests some very tentative evidence of a possible loss of faith in education as a mechanism for upward mobility. Such indicative evidence is of considerable value given the absence of panel data for most cities in developing countries.