Journal of Research in Economics and International Finance

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Impact of Education on Poverty Reduction: A Co-integration Analysis for Pakistan

Abstract

Sikander Pervez

Nations cannot be developed without investing in education. Education is a multidimensional process, on one side, it enhances the economic growth and on the other side, it reduces the poverty by increasing the productivity but poverty is out of control in the rural areas of the Pakistan, where people are in a state of deprivation with regards to incomes, clothing, housing, and health care and education facilities. The study analyzed the impact of Education on poverty reduction in Pakistan extracting 34 time series annually observations. The study employed Augmented Dickey-Fuller (ADF), causality and Johansen co integration methodology to test for the existence of a long run relationship between variables. The study concluded that Literacy rate and Gross Enrollment (Secondary) has negative and significant impact on poverty in long run but Life Expectancy has positive impact on poverty. The study recommended that Government should focus on the quantity and quality of education that, in turn, leads to more researches in the country.

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