Human Capital and Poverty in Pakistan: Evidence from the Punjab Province

The role of human capital (education and health) is recognized both in theoretical and empirical economic literature. Better education and health services enhance productivity and earnings of the workers. So the present study is an attempt to assess the impact of human capital in poverty alleviation. A cross-sectional data of 34 districts of Punjab province was used for the analysis. Three equations have been estimated by using the ordinary least square method. Education and health services are found to have poverty lessening impact in the economy. The results are statistically robust as adjudged by the R-squared and F-value. The error terms of the estimated models fulfill the standard OLS assumptions. It is suggested that imparting of knowledge, training and skills in the people empowers them. Improved human resources increase the productivity and earnings of the workers. Furthermore, improved human capital can play its role in reducing multidimensional poverty and its severity. The study suggests a substantial increase in education and health expenditure by the government. Proper campaign to increase the enrollment can be fruitful. Every born child has its basic right to obtain basic education and health services. Provision of education and health services can help the poor to break the vicious cycle of poverty.