Socioeconomic Empowerment and Rural Household Poverty in Pakistan: a Case Study of Bahawalpur Division
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Socioeconomic Empowerment and Rural Household Poverty in Pakistan: A Case Study of Bahawalpur Division Thesis submitted in the partial fulfillment of the requirement for the degree of “Masters of Philosophy in Economics” BY Muhammad Abrar-ul-Haq Roll No: 25 Session 2011-2013 Department of Economics Supervised By: Dr. Rana Ejaz Ali Khan Department of Economics In the name of Allah the Most Merciful the Most Beneficent Dedication TABLE OF CONTENTS Title Page No. Chapter No. 1 INTRODUCTION 1 1.1 Types of Poverty 2 1.1.1 Absolute Poverty 2 1.1.2 Relative Poverty 3 1.1.3 Participatory Poverty 4 1.2 History of Poverty in Pakistan 5 1.2.1 Poverty Trends in Pakistan 5 1.2.2 Rural Poverty Trends in Southern Punjab 7 1.3 Socio Economic Empowerment 9 1.4 Relationship between Socio Economic Empowerment and Poverty 10 1.5 Introduction to Bahawalpur Division 10 1.6 Objective of the Study 11 1.7 Significance of the Study 11 1.8 Scheme of the Study 12 Chapter No. 2 REVIEW OF LITERATURE 13 Chapter No. 3 CONCEPTUAL FRAMEWORK 29 3.1 Poverty Estimation 30 3.2 Poverty Indices 31 3.2.1 Headcount Index 31 3.2.2 Poverty Gap Index 32 3.2.3 Squared Poverty Gap Index (Poverty Severity) 32 3.2.4 Sen Index 33 3.2.5 The Sen-Shorrocks-Thon Index 34 3.2.6 The Watts Index 35 3.2.7 Time Taken to Exit 35 3.2.8 Other Measures 36 3.3 Socioeconomic Empowerment 37 3.4 Determinants of Poverty 38 3.4.1 Socioeconomic Empowerment 38 3.4.2 Agriculture Occupation 38 3.4.3 Experience of Agriculture Occupation 38 3.4.4 Remittances 39 3.4.5 Female- Male Ratio 39 3.4.6 Employment Ratio 40 3.4.7 Household Size 40 3.4.8 Sewerage System 40 3.4.9 Gender of Household Head 40 3.4.10 Household Accessories 41 3.4.11 Assets and Property 41 3.4.12 Average Education of Household 41 3.4.13 Income of Household 41 3.4.14 Services Occupation of Head of Household 42 3.4.15 Shelter 42 3.4.16 Live Stock 42 3.4.17 Health with in Household 42 3.4.18 Access to Infrastructure 43 3.4.19 Dependency Ratio 43 3.4.20 Religion 43 Chapter No. 4 DATA AND METHODOLOGY 44 4.1 Dimensions of the Study 44 4.1.1 Research Question 44 4.1.2 Study Area 44 4.1.3 Study Period 45 4.1.4 Data Collection 45 4.2 Estimation and Procedures 46 4.3 Poverty Line 46 4.4 Household Poverty 47 4.5 Participatory Poverty 47 4.6 Socio-economic Empowerment Index 48 4.6.1 Indicator Variables 48 4.6.2 Shelter 48 4.6.3 Education 49 4.6.4 Assets and Property 49 4.6.5 Live Stock 50 4.6.6 Health with in Household 50 4.6.7 Gender of Household Head 50 4.6.8 Household Accessories 50 4.6.9 Access to Infrastructure 51 4.7 Construction of Index 51 4.8 Household Poverty 59 4.8.1 Model 1 59 4.9 Selection of Variables 60 4.9.1 Socio-economic Empowerment 60 4.9.2 Agriculture Occupation 60 4.9.3 Experience of Agriculture 60 4.9.4 Remittances 61 4.9.5 Female- Male Ratio 61 4.9.6 Employment Ratio 61 4.9.7 Household Size 62 4.9.8 Sewerage System 62 4.10 Participatory Poverty 62 4.10.1 Model 2 63 4.11 Selection of variables 64 4.11.1 Gender of Household Head 64 4.11.2 Household Accessories 64 4.11.3 Assets and Property 64 4.11.4 Average Education of Household 65 4.11.5 Agriculture Occupation of Household Head 65 4.11.6 Income of Household 65 4.11.7 Services Occupation of Household Head 66 Chapter No. 5 RESULTS AND DISCUSSION 68 5.1 Descriptive Analysis 68 5.2 Econometrics analysis of Household poverty 82 5.2.1 Discussion 84 5.3 Econometrics Analysis of Participatory Poverty 86 5.3.1 Discussion 87 Chapter No. 6 CONCLUSIONS AND RECOMMENDATIONS 90 REFERENCES 94 ANNEXURE TABLES Title Page No. 1.1 Headcount Measure (% below Poverty Line) for Pakistan— 1992-93 to 2004-05 6 1.2 Trends of Rural Poverty in Southern Punjab 8 4.1 Description Data of Policy Variables 51 4.2 Eigenvalues of the Correlation Matrix of Socio-economic Empowerment Policy Variables 53 4.3 Extraction values of socioeconomic Empowerment Policy Variables 55 4.4 Socioeconomic Empowerment Index 57 4.5 Description of Variables 67 5.1 Incidence of Household Poverty in Sample 68 5.2 Incidence of Participatory Poverty in Sample 68 5.3 Education Level of the Household Head and Incidence of Poverty 69 5.4 Average Education of the Household and Incidence of Poverty 71 5.5 Household Size and Incidence of Poverty 72 5.6 Remittances and Incidence of Poverty 73 5.7 Agriculture Occupation and Incidence of Poverty 73 5.8 Employment Ratio and Household Poverty 74 5.9 Number of Children and Household Poverty 75 5.10 Number of Females in House and Household Poverty 76 5.11 Number of Males in House and Household Poverty 77 5.12 Separate Kitchen in House and Household Poverty 78 5.13 Availability of Water Supply for House and Household Poverty 79 5.14 Sanitation System in House and Household Poverty 79 5.15 Electricity in House and Household Poverty 80 5.16 Access to Announce Price of Government of Inputs and Household Poverty 80 5.17 Access to Sport Price of Government of Agriculture Output and Household Poverty 81 5.18 Access to School and Household Poverty 81 5.19 Regression Estimates with Incidence of Poverty as Dependent Variables 83 5.20 Regression Estimates with Participatory Poverty as Dependent Variables 86 Chapter 1 INTRODUCTION Poverty has many dimensions, like malnourishment, hunger, economic exploitation, no shelter, violence, no decision making in political system, poor living condition, and no facility for school and uncertainty of tomorrow, etc. Powerlessness, lack of representation and freedom is another name of poverty. Poverty has many types varying from place to place and time to time and it has been portrayed in various manners. Poverty is the “incapability to maintain a minimum living standard anticipated with respect to basic consumption needs or some amount of income required for satisfying them (World Bank (2006). The problem of poverty has been for a long time at the core of development struggles between the states of the world. It is a central attention on the millennium development goals; the first of the eight goals which is to half the amount of the world’s residents living under $1.25 per day (United Nations, 2010). Poverty is a multidimensional concept and has been viewed in different ways by many scholars. However, what appears to be a common view is that poverty exists when one is unable to satisfy some certain basic requirements. Of course, the subject of “basic needs or requirements” is also debatable. However, irrespective of how poverty is conceived, poverty analysis begins with the recognition of basic needs, what constitutes these basic requirements as well as the notion of deprivation. Although it is considered as the outcome of the interrelationship between the socio-political and actions that eventually result into human deprivation and deterioration in the living conditions of the people. It is considered the lack of access to basic necessities such as food, water, housing and clothing, as well as the inaccessibility to the social, cultural and means necessary to guarantee, productivity, social reproduction, and everyday life 1 of the society (The World Bank, 2000). The poor do not have access to adequate education and are unable to meet their basic needs in health and other necessities (Akerele, et al., 2012). What seems to be an ordinary interpretation is that poverty occurs when one is not able to assure a number of certain basic requirements but poverty is not only the name of hunger, if people has no access to basic infrastructure of government and do not participate in social or local decisions of community, those people are also called poor because of their poor participation. That kind of poverty may be called participatory poverty. People are excluded when they are not part of the networks which support most people in ordinary life – social networks, community and local infrastructure. Poverty is a very broad and wide concept: it includes not only hunger and shelter, but problems of social-local relationships, access to basic infrastructure of government and failures in social protection. 1.1 Types of Poverty Poverty is usually divided into two groups, absolute or intense poverty and relative poverty. 1.1.1 Absolute Poverty Absolute poverty is when people do not have the basic necessities for survival. For example, they may be starving, lack clean water, proper housing, sufficient clothing or medicines and be struggling to stay alive. But it was argued that a conventional money-metric poverty line analysis may be inadequate to capture a range of significant dimensions of deprivation. A single 2 poverty line exercise captures a picture in time according to the consumption measure. In the absence of other complementary quantitative or qualitative exercises it does not capture dynamic dimensions of change over time – together with cyclic variations in access to food, health condition, income etc. and vulnerability to shocks of different kinds and the negative impacts of long-term trends.