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Impact of Credit on Education and Healthcare Spending in Rural Pakistan

Author

Listed:
  • Abid Hussain

    (MPhil Research Scholar, Pakistan Institute of Development Economics, Islamabad)

  • Muhammad Jehangir Khan

    (Assistant Professor, Pakistan Institute of Development Economics, Islamabad)

  • Iftikhar Ahmad

    (Assistant Professor, Pakistan Institute of Development Economics, Islamabad)

Abstract

It is to access that the microcredit has a positive impact on education and healthcare spending of the borrowed households is controversial in developing countries literature or not. This study reports evidence, from Pakistan for this debate, while utilising data from PPHS-2010 (Pakistan Panel Household Survey). Propensity score matching (PSM) has been used to investigate the impact of household credit on healthcare and education spending by the poor. In addition to matching statistically identical borrowers with non-borrowers, the method controls for household pre-treatment assets and income. These may be correlated with unobservable factors affecting credit participation as well as outcomes of interest. The estimates from binary as well as multiple ordered treatment effect show insignificant impact of borrowing on education and significant and positive impact on healthcare spending.

Suggested Citation

  • Abid Hussain & Muhammad Jehangir Khan & Iftikhar Ahmad, 2016. "Impact of Credit on Education and Healthcare Spending in Rural Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 55(4), pages 853-870.
    • Handle: RePEc:pid:journl:v:55:y:2016:i:4:p:853-870
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    File URL: http://www.pide.org.pk/pdf/PDR/2016/Volume4/853-870.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Matching; Household Credit; Per-capita Income; Education and Healthcare Spending;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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