The impact of human capital on urban poverty: The case of Sargodha city

Awan, Masood Sarwar and Iqbal, Nasir and Muhammad, Waqas (2011): The impact of human capital on urban poverty: The case of Sargodha city. Published in: Journal of Sustainable Development , Vol. 4, No. 1 (2011): pp. 143-150.

Abstract

The positive relationship between human capital and income/wages has been supported by empirical research. Millennium Development Goals (MDGs) and the Poverty Reduction Strategy Paper (PRSP) enormously emphasize on human capital for curbing poverty. The economic development in East Asian countries is also linked with investment in education for the development of human capital. This study is designed to investigate the relationship of different levels of education and experience upon urban poverty at medium sized city in Pakistan such as Sargodha. A survey-based analysis was carried out on a sample of 330 households. Poverty status of the individual is defined by using adjusted official poverty line. Results show that education and experience is negatively related with the poverty status of individuals and this fact sustains even in separate gender estimates as well. This implies education of poor is necessary in breaking the vicious circle of poverty. Combined effort by public, private, community participation and NGO’s with special focus on elementary (Primary and middle) education is suggested for reducing poverty by increasing the productivity of the poor through education.

• Item Type: MPRA Paper
• Language: English
• Keywords: Human Capital, Urban Poverty, Sargodha, Pakistan
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I32 - Measurement and Analysis of Poverty

References

Arif, G. M. and Bilquees, F. (2007). hronic and Transitory Poverty in Pakistan: Evidence from a Longitudinal Household Survey, The Pakistan Development Review, 46(2).

Arif, G. M. and Iqbal, N. (2009). Infrastructure and Poverty Nexus: the Case of Rural Pakistan in Socio-Economic Challenges Faces by Pakistan, Proceedings of National Conference, Islamic International University, Islamabad.

Asian Development Bank. (2005). Poverty in the Philippines: Income, Assets, and Access, ADB.

Awan, M. S. and Iqbal, N. (2010). Determinants of Urban Poverty: The Case of Medium Sized City in Pakistan, PIDE Working Paper Series 2010:60, Pakistan Institute of Development Economics, Islamabad.

Awan, M. S., Malik, N. and Sarwar, H. (2008). Impact of Education on Poverty Reduction, EABR & TLC Conferences Proceedings Rothenburg, Germany.

Becker, G. S. (1962). Investment in Human Capital: A Theoretical Analysis, Journal of Political Economy, 70(5). Government of Pakistan. (2008). Pakistan Economic Survey 2007-08, Ministry of Finance Islamabad.

Haq, R. (2005). An Analysis of Poverty at the Local Level, The Pakistan Development Review, 44 (4). Hungerford, T., and Solon, G. (1987). Sheepskin Effects in the Returns to Education, Review of Economics and Statistics, 69.

Jamal, H. (2005). In Search of Poverty Predictors: The Case of Urban and Rural Pakistan, The Pakistan Development Review, 44 (1).

Jamison, D. T., and Lau, L. I. (1982). Farmer Education and Farm Efficiency, The John Hopkins University Press, Baltimore.

Kooreman, P. and Wunderlink, S. (1997). Economics of household behavior, St. Martins Press.

Kurosaki, T. and Khan, H. (2006). Human Capital, Productivity, and Stratification in Rural Pakistan, Review of Development Economics, 10 (1).

Lockheed, M., Jamison, D. T., and Lau, L. I. (1980). Farmer Education and Farm Efficiency: A Survey, Economic Development and Cultural Change, 29(1).

Mincer, J. (1974). Schooling, Experience and Earnings, National Bureau of Economic Research.

Mughal, W. H. (2007). Human Capital Investment and Poverty Reduction Strategy in Pakistan, Labour and Management in Development, 7 (4).

Nasir, Z. M. and Nazli, H. (2000). Education and Earnings in Pakistan, Research Report No. 177, Pakistan Institute of Development Economics (PIDE). PDS. (2007). Punjab Development Statistics, Government of Punjab, Pakistan.

PER. (2007). Punjab Economic Report, Government of Punjab, Pakistan.

Qureshi, S. K. and Arif, G. M. (2001). Profile of Poverty in Pakistan 1998-99, MIMAP Technical Paper Series No. 5, Pakistan Institute of Development Economics, Islamabad.

Schultz, T.W. (1960). Capital formation by education, The Journal of Political Economy, 68(6).

Schultz, T.W. (1961). Investments in Human Capital, American Economic Review, 51.

Schultz, T.W. (1975). The value of the ability to deal with disequilibria, Journal of Economic Literature, 13.

Tilak, J. B. G. (1994). Education for Development in Asia. New Delhi: Sage Publications.

Tilak, J. B. G. (2002). Education and Poverty, Journal of Human Development, 3 (2).

Tilak, J. B. G. (2005). Post Elementary Education, Poverty and Development in India, Working Paper. Series-N6 (REVISED) Centre of African Studies, University of Edinburgh

World Bank. (1993). The East Asian Miracle: Economic Growth and Public Policy, Policy Research Report, Oxford University Press.

Zuluaga, B. (2007). Different Channels of Impact of Education on poverty: an analysis for Colombia, Discussion Paper, www.econ.kuleuven.be/CES/discussionpapers/Dps07/Dps0702.pdf.