Multidimensional Poverty Assessment in Pakistan: Does Household Dependency Escalate Poverty?

Abstract

The household dependency ratio on young or old family members is considered a major determinant in poverty when human capital cannot support the family income. Since the elderly suffer a significant risk of poverty and make up an increasing percentage of the population, the country’s economic inequality is quite sensitive to population ageing. Family size adversely affects household well-being when focusing on children under 15 and adults over 65. The dependency increases the burden on bread earners and reduces consumption expenditure. The current study uses family reliance and the multidimensional poverty concept to analyse how poverty is distributed throughout different provinces. The current study intends to provide poverty analysis across all four provinces of Pakistan using the Alkire and Foster method of multidimensional poverty indexes from Household Integrated Economic Survey data. The study found that increasing child dependence significantly reduces consumption and exacerbates poverty. The Seniors Dependency Indicator demonstrates that as the elderly population in Sindh, Punjab, and Khyber Pakhtoon Khwa (KPK) declines, poverty decreases. All provinces saw an increase in the prevalence of child poverty, with the highest KPK rates in Punjab (6%) and Sindh (4%), respectively. Since the functional sector does not have to shoulder the full load, the government should set up safety support mechanisms for these segments to lessen the burden on wage workers. According to the survey, access to clean water and literacy rates are the other leading indicators of poverty alleviation.