Impact of Employment on Multidimensional Poverty: A Case Study of Rawalpindi District Pakistan

Abstract

Objective: The present study attempts to investigate the role of employment on multi-dimensional poverty (MPI) of Rawalpindi district.

Research Gap: The existing empirical literature on poverty in Pakistan hints to numerous general inferences; for example, a large number of studies focused on the measurement and determinants of monetary poverty. However, limited number of empirical studies has examined multidimensional poverty. However, little attention has given the impact of employment on multidimensional poverty particularly at the household level in the Rawalpindi district. This study aims to fill this gap in the existing literature.

Design/Methodology/Approach: In this study, the Alkire and Foster (2011) methodology is used to estimate the incidence of poverty. Poverty is measured at two levels (district and regions) and in three dimensions (Education, health, and living standard). For this purpose, the employment status, occupations, and major industrial sector are considered for households. Further, study investigates the impact of employment on multidimensional poverty using Ordinary least square method (OLS).

The Main Findings:  Using regression analysis we find that employment status is significant and negatively associated with the poverty of households. The community sector is showing negative and significant results. Overall, the results show that employment and poverty have an inverse relation. For reducing poverty, the government should provide job opportunities in those sectors and occupations where there are more chances of poverty alleviation.

Theoretical / Practical Implications of the Findings:

Theoretically, this study is based on Amartya Sen's Capability approach, which states that poverty is a multidimensional term in nature. Since there are many different aspects to poverty, measuring it only in monetary terms is not useful. Based on the empirical findings, this study urges decision-makers to move beyond income-centric views of poverty and must focus on enhancing people's freedoms to lead lives that they give value. If the decision-makers design policies to overcome the structural barriers and expand individuals' choices, Pakistan can make a sustainable pathway out of poverty.

Originality/Value:

By employing the regression analysis using a multidimensional poverty dataset, the study provides valuable insight on the impact of employment level on poverty in Rawalpindi district. Further, the findings of the study provide practical implications for policymakers seeking to reduce poverty and enhance the employment level at the household level in the Rawalpindi district.