Determinants of Household Poverty: Empirical Evidence from Pakistan

This study examines household characteristics and personal characteristics of the household head as the determinants of poverty in Pakistan. The study decomposes education of the household into different levels: primary, middle, matriculation, intermediate, bachelors and higher studies and finds evidence that poverty is greatest among the less literate households and declines as education level increases. The role of remittances appeared significant in reducing probability of being poor and this is more striking in rural areas. The probability of being poor reduces in urban area implying that incidence and severity of poverty is more pronounced in rural areas. The variables that are negatively related with the probability of being poor are: experience, age square and agriculture employment status. While the variables that are positively related with the probability of being poor are: household size, age of the household head, male-headed households and the provincial residence.