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Impact of Human Capital on Poverty Reduction in Pakistan

Author

Listed:
  • Rashid Naweed

    (Government Graduate College Toba Tek Singh, Pakistan)

  • Muhammad Kashif Saeed

    (Government Graduate College Toba Tek Singh, Pakistan)

  • Hashim Ali

    (Government Graduate College Toba Tek Singh, Pakistan)

Abstract

This paper determines the impact of various health indicators on poverty reduction in Pakistan. Health indicators affect the Poverty through increasing Labor productivity and through improving Education. GNP per capita is a proxy variable for poverty reduction. Life Expectancy, infant mortality rate, total health Expenditures, and Population per doctor are explanatory variables in Model 1. The study has regressed these health indicators on Education in Model 2. To determine the Short-run and long run relationship among the variables the research applied the Co-integration (ARDL) and Error Correction Model. The study uses the Augmented- Dickey-Fuller test to check the unit root. The study has analyzed the time series data of Pakistan from 1985 to 2021.The research finds that health indicators like: Life expectancy and Infant mortality increase the GDP per Capita in the long run. The health indicators also have positive effects on education and as a result, Education increases the GDP per capita in the short- run and long run. The research concludes that improvement in human capital leads to decrease the poverty and to improve the health and education sectors of the society. The major policy implication of this study is that to decrease poverty and look for a healthy and educated society, then the government should urgently and seriously focus on the health sector of Pakistan.

Suggested Citation

  • Rashid Naweed & Muhammad Kashif Saeed & Hashim Ali, 2022. "Impact of Human Capital on Poverty Reduction in Pakistan," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(3), pages 419-428, September.
    • Handle: RePEc:ani:irdjoe:v:4:y:2022:i:3:p:419-428
    DOI: 10.52131/joe.2022.0403.0089
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    References listed on IDEAS

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    1. Andrea Bassanini & Stefano Scarpetta, 2001. "Does Human Capital Matter for Growth in OECD Countries?: Evidence from Pooled Mean-Group Estimates," OECD Economics Department Working Papers 282, OECD Publishing.
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    3. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    4. Zafar Mueen Nasir & Nasir Iqbal, 2009. "Employers Size Wage Differential: Does Investment in Human Capital Matter?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 48(4), pages 509-521.
    5. Ogundari, Kolawole & Awokuse, Titus, 2018. "Human capital contribution to economic growth in Sub-Saharan Africa: Does health status matter more than education?," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 131-140.
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