Impact of education on poverty reduction

Poverty is a stumbling block in the way of achieving economic development. Cognizant of the essence of Millennium Development Goals (MDGs) and ‘Education for All’ program, education is promulgated as the primary weapon against poverty prevalence. Hence it is important to seek out the effect of different levels of education upon poverty in Pakistan. This study evaluates the effect of different levels of education, experience and gender of the employed individuals (employers, self-employed, wage earners and unpaid family workers) as the determinants of poverty. The data for this task comes from the Household Integrated Economic Survey (HIES) for the years 1998-99 and 2001-02. A logistic regression model is estimated based on this data, with the probability of an individual being poor as the dependent variable and a set of educational levels, experience and gender as explanatory variables. It is found that experience and educational achievement is negatively related with the poverty incidence in both years. Also as we go for the higher levels of education the chances of a person being non-poor increases. Moreover, being a male person provides an advantage in retaining a position above poverty level.