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The Role of Human Capital Factors on Poverty in Informal Settlement: Informal Settlement of Sheikh-Hasan, Mashhad City, Iran

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  • Javad Barati
  • Sahar Soltani
  • Simin Froogh-Zadeh
  • Farzaneh Razaghian

Abstract

This paper investigates the determinants of multi-dimension poverty in informal settlements of Mashhad City. It specially analyzes human capital factors, among factors that influence poverty level. Education, skills, experience and knowledge have important role in promoting income level and in access to sustainable jobs, especially in informal settlements that have lower human capital level than the urban areas other. Mashhad city has most marginal settlements in Iran. Sheikh-Hasan Neighborhood in Mashhad Municipality region 4 has been selected as case study. This study is based on information gathered from household level in 2016 and the ordered logit model is employed to estimate factors influencing urban poverty. Data were obtained from 300 households using the questionnaire Through the Systematic Random technique. Calculation of poverty indexes reveals that nearly 87% of households are below absolute poverty line and 20% of households are below extreme poverty line. Marginal effects show variables of “job stability”, “Ownership”, “Household size” and “Education of household head” have the greatest impact on poverty alleviation. Also, variables of “Education level” and “highest level of education of household members” have positive effect and significant on poverty. Results represent that poverty in informal settlements of Mashhad is strongly linked to factors such as human capital. In addition, with increasing the level of knowledge of household heads and creation of favorable conditions for increasing of the education level of household members can reduce poverty.

Suggested Citation

  • Javad Barati & Sahar Soltani & Simin Froogh-Zadeh & Farzaneh Razaghian, 2017. "The Role of Human Capital Factors on Poverty in Informal Settlement: Informal Settlement of Sheikh-Hasan, Mashhad City, Iran," Journal of Sustainable Development, Canadian Center of Science and Education, vol. 10(4), pages 1-22, July.
    • Handle: RePEc:ibn:jsd123:v:10:y:2017:i:4:p:22
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    References listed on IDEAS

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    1. Stefan Dercon & Krishnan Pramila, 1998. "Changes in Poverty in Rural Ethiopia 1989-1995: Measurement, Robustness Tests and Decomposition," Working Papers of Department of Economics, Leuven 501299, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    2. Ali, Sharafat & Ahmad, Najid, 2013. "Human Capital and Poverty in Pakistan: Evidence from the Punjab Province," MPRA Paper 48876, University Library of Munich, Germany, revised Aug 2013.
    3. Awan, Masood Sarwar & Iqbal, Nasir & Muhammad, Waqas, 2011. "The impact of human capital on urban poverty: The case of Sargodha city," MPRA Paper 31829, University Library of Munich, Germany.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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