Transcript Working Poor in Pakistan

Shujaat Farooq, Mohsin Kiani and G. M. Arif
Pakistan Institute of Development Economics (PIDE)
Islamabad
1
Introduction
 Economic growth is necessary but not sufficient
condition for poverty reduction
 Poor people mostly derive their incomes from work.
Both access to job and the quality of job are critical
for poverty reduction
 But, in developing countries, many poor who work are
not able to escape poverty
 The hybrid concept of “working poverty” sticks
together the employment status and poverty status
 It can be characterized as household or individual
phenomenon
2
Labour Force Participation and Vulnerable Employment
1999-00
2005-06
Labour Force Participation Rate
Both sexes
50.4
53
Male
83.2
84
Female
16.3
21.1
Employment-to-Population Ratio
Both sexes
46.8
49.7
Male
78.6
79.6
Female
13.7
19
Share of Vulnerable Employment (%)
Both sexes
63.1
60.6
Male
62.5
57.7
Female
66.7
73.3
Share of Employment in Informal Economy (%)
Both sexes
65
72.3
Male
65
72.2
Female
63.9
73.1
Source: various editions of LFS
2008-09
2010-11
53.1
82
23.1
53.4
81.9
24.4
50.3
78.5
21
50.4
78
22.2
61.9
58
77.3
61.6
57
78.3
73
73.1
71.6
73.5
73.9
70.6
Selected indicators by sector from 1999-2000 to 2010-2011 (%)
7/17/2015
4
Indices of the selected indicators (Index 1999-2000 = 100)
7/17/2015
5
Objectives of the study
i.
To examine the magnitude of working poor in
Pakistan,
ii. To analyze the relationship between working
poverty and employment vulnerability in Pakistan
6
Data Sources
 HIES 2010 and PPHS 2010 have been used for analysis
 HIES 2010 has covered 16341 households while PPHS
2010 has covered 4142 households
 10 and above age working population is unit of analysis
7
Defining working poor
 The study has defined working poor as household and at
individual level. At household level;
 “All member of households having at-least one member
employed in labor market, but their per capita income remains
below the official poverty line".
 At individual level, working poor is a person who is working
but is poor at household level.
 Head count poverty has been used for PPHS data while
lower per capita quintile is assumed as poverty indicator
in HIES data.
 Working poor are defined as those who are working and
are poor
8
Model Specification
 The following two models has been estimated to find out the
correlates of working poverty for HIES and PPHS datasets where
dependent variable is binary
1) WP ind = α ind + α1 I ind + α2 Hd ind + α3 Rg ndi + µ 1i
2) WP hh = α hh + α1 I hh + α2 Hd hh + α3 Rg hh + µ 2i
 Following two models has been estimated to find out the correlates
of vulnerable working poverty for HIES and PPHS datasets where
dependent variable is binary and ordinal
3) WPV ind = α ind + α1 I ind + α2 Hd ind + α3 Rg ndi + µ 3i
4) WPVOR ind = α ind + α1 I ind + α2 Hd ind + α3 Rg ndi + µ 4i
9
Estimates of Working
Poverty
10
Monetary Poverty and Working Poverty
Overall
Urban
Rural
20.7
16.6
22.4
1st Quintile Poverty (HIES)
16.9
10.7
21.3
Working Poverty at
Household level (PPHS)
19.7
11.8
19.3
Working Poverty
(PPHS) Individual level
20.2
15.7
21.7
Working Poverty
(HIES) Individual level
16.5
10.1
20.5
Poverty
Head Count Poverty (PPHS)
11
Profile of Working Poor (%) —HIES 2010
Both Sexes
Female
Male
Vulnerable
18.0
21.9
18.4
Non-vulnerable
12.5
18.3
13.7
10-24
25-39
17.0
22.0
17.8
15.9
21.1
16.7
40-60
15.8
16.7
16.0
61 and above
10.0
15.4
10.5
Illiterate
23.2
25.2
23.7
1-5 grade
19.1
17.9
19.0
6-8 grade
13.6
11.1
13.4
9-10 grade
9.7
9.3
9.6
11-12 grade
6.7
2.4
6.3
14 and above grade
3.0
0.9
2.6
Age
Education
12
Profile of Working Poor (%) by Region—HIES 2010
Both Sexes
Sector of Employment
Agriculture
18.8
Mining and Manufacturing
13.5
Electricity, gas and water
4.6
Construction
25.1
Whole sale, retail, transport and
14.1
communication
Finance and Business services
6.6
Community, social and Personal Ser.
10.5
Region
9.9
Urban
19.9
Rural
Province
14.9
Punjab
17.9
Sindh
18.8
KPK
12.0
Balochistan
Female
Male
22.5
27.9
0.0
36.7
19.9
15.5
4.5
25.2
23.8
14.3
4.4
12.1
6.5
10.9
11.3
23.1
10.1
20.5
20.2
23.7
14.2
8.8
16.0
18.8
18.2
11.9
13
The Determinants of Working Poverty—Logistic Regression Analysis
HIES
PPHS
Correlates
Odd ratio
Std. Error
Odd ratio
Std. Error
Vulnerable employment (yes=1)
1.862*
0.085
1.573*
0.100
Sex (male=1)
0.860*
0.041
0.862**
0.060
Age (in years)
1.042*
0.007
0.995
0.009
Age square
0.999*
0.000
1.000
0.000
Below matric/illetrate
0.594*
0.024
0.618*
0.042
Matric and above/illetrate
0.262*
0.016
0.427*
0.044
Household size (in numbers)
1.199*
0.006
1.092*
0.006
Occupation (manager, prof. and Assoc. Prof. as ref.)
Sales and Services
2.194*
0.216
1.167
0.195
Skilled worker
1.760*
0.167
1.273
0.197
Elementary occupation
3.055*
0.281
1.702*
0.259
Region (Urban=1)
0.483*
0.020
0.751*
0.054
Sindh/Punjab
0.928***
0.039
1.396*
0.086
KPK/Punjab
0.897**
0.045
0.244*
0.033
Balochsitan/Punjab
0.402*
0.025
0.729*
0.080
Constant
0.020*
0.003
0.109*
0.026
28,819
8930
N
*significant at 1` percent, ** significant at 5 percent, *** significant at 10 percent
Note: in occupation, armed forces excluded
14
Determinants of Working Poor at Household level- Logistic Regression (PPHS 2010)
Correlates
Odds Ratio
Age of head (years)
0.95
Age square
1.00
Education of head (Matric as Ref.)
No education
1.73
Primary education
1.65
Above matriculation
0.46
Occupation of head (Managers and officials as ref.)
Agricultural and fishery
1.34
Sales and services
1.52
Office clerks
0.62
Elementary
1.37
Household size
1.40
Employment status of head (Self-employed as ref.)
Regular paid workers
1.28
Casual paid workers
2.10
Piece paid workers
1.57
Dependency ratio (low as ref.)
Medium
1.38
Significance
5%
In-sig
1%
5%
5%
10%
5%
5%
10%
1%
10%
1%
5%
5%
15
Estimates of Vulnerable
Employment
16
Distribution of Employed Labour Force by Employment Status
Employment
status
LFS 1999-2000
LFS 2010-11
Overall
Male
Female
Overall
Male
Female
Self-employed
42.2
46.4
16.7
34.9
40.5
15.6
Unpaid family
Worker
21.4
16.7
50.1
27.7
17.3
63.4
Employees
35.6
36
33.1
36
40.4
20.9
Employers
0.8
0.9
0.1
1.4
1.8
0.1
Source: LFS 1999 and 2010 edition
Distribution of Employed Labour Force by Employment Status
Employment status
HIES 2010
PPHS 2010
Female
Male
Female
Male
Self-employed (Nonagri.)
4.0
13.3
1.2
10.8
Self-employed (Agri.)
6.4
12.5
4.3
20.6
Unpaid family worker
45.4
12.3
36.1
Employees
44.2
61.3
58.2
53.5
Employers
0.0
0.8
0.3
1.3
13.7
Presence of Underemployment by Type of Employment
80
69.9
70
60
50
40
34.2
32.3
30
19.8
20
13.4
15 12.6
10
0
1.7
0.1 1.1
Employer
Employees
Self employed
(non-agri.)
Female
Self employed
(agriculture)
Unpaid worker
Male
19
Estimates of Working Poverty
and Vulnerable Employment
20
Working Poverty and Vulnerability by Region—HIES 2010
Female (% of Total)
Category of
Working Poverty
and Vulnerability
Rural
Working Poor and
Vulnerable (WPV)
7.7
2.2
12.8
Working Poor and
Nonvulnerable(WPNV)
Working Non-poor
and Vulnerable
(NWPV)
Working Non-poor
and Non-vulnerable
(NWPNV)
Total
N
Urban
Overall
Rural
Urban
Overall
5.6
31.7
12.1
28.8
7.8
10.9
14.4
12.1
14.0
41.3
25.2
35.1
25.4
7.7
20.6
38.2
64.7
48.4
9.8
12.8
11.3
100
100
100
-
-
-
17,845
11,059
28,904
3,303
1,272
4,575
21
Working Poverty and Vulnerability by Region—PPHS 2010
Female (% of Total)
Category of
Working Poverty
and Vulnerability
Rural
Working Poor and
Vulnerable (WPV)
10.1
3.1
11.7
Working Poor and
Nonvulnerable(WPNV)
Working Non-poor
and Vulnerable
(NWPV)
Working Non-poor
and Non-vulnerable
(NWPNV)
Total
N
Urban
Overall
Rural
Urban
Overall
8.3
23.3
26.4
23.6
12.6
11.9
25.8
21.4
24.7
40.2
24.0
36.2
20.0
9.6
18.3
38.2
60.3
43.6
23.5
16.2
21.0
100
100
100
-
-
-
6,878
2,226
9,104
1,537
346
1,883
Status of Working Poverty and Vulnerability by Sex (%)-HIES
2010
100.0
79.5
80.0
71.2
60.0
40.0
28.8
20.6
20.0
0.0
Working Poor and Vulnerable
Female
Working Non-poor and Vulnerable
male
23
Status of Working Poverty and Vulnerability by Region (%)HIES 2010
100.0
84.7
80.0
72.5
60.0
40.0
27.5
20.0
15.3
0.0
Working Poor and Vulnerable
Rural
Working Non-poor and Vulnerable
Urban
24
Status of Working Poverty and Presence of Vulnerability by Working days in
a month-HIES 2010
Female
Male
Worked days
in a month
WPV
NWPV
WPV
NWPV
Upto 14 days
5.2
4.1
2.1
1.0
15-19 days
7.1
8.6
4.6
2.0
20-24 days
20.8
17.0
12.8
9.8
25-30 days
67.0
70.3
80.5
87.2
Total
100
100
100
100
25
Status of Working Poverty and Presence of Vulnerability by Type of
Education and Sex ---HIES 2010
Male
Female
Education (in
category)
VWP
VNWP
VWP
VNWP
Illiterate
89.9
77.0
55.3
35.2
Below Matric
8.6
17.9
33.4
36.2
Matric and
above
1.5
5.2
11.3
28.6
100
100
100
100
Total
26
Status of Working Poverty and Presence of Vulnerability by Type of
Education and Sex (Rural only)—HIES 2010
Female
Male
Education (in
category)
VWP
VNWP
VWP
VNWP
Illiterate
91.5
80.3
56.8
42.4
Below Matric
7.6
16.7
32.6
36.6
Matric and above
0.9
3.0
10.7
20.9
Total
100
100
100
100
7/17/2015
27
Status of Working Poverty and Presence of Vulnerability by Type of
Education and Sex (Urban only)—HIES 2010
Female
Male
Education (in
category)
VWP
VNWP
VWP
VNWP
Illiterate
68.8
47.9
48.8
19.7
Below Matric
21.9
27.9
37.2
35.4
Matric and above
9.4
24.2
14.0
44.9
Total
100
100
100
100
28
Status of Working Poverty and Presence of Vulnerability by Type of Self
Employment —HIES 2010
Female
Male
Type of Self
Employment
VWP
VNWP
VWP
VNWP
Non-agriculture
41.9
38.2
49.0
52.1
Own cultivator
13.5
15.9
22.5
29.4
Sharecropper
0.0
1.5
17.4
8.8
Contract cultivator
0.0
0.5
5.2
3.5
Livestock
44.6
43.9
5.9
6.2
Total
100
100
100
100
29
Status of Working Poverty and Presence of Vulnerability by Type of Self Employment
(Rural only) —HIES 2010
Type of Self
Employment
Female
Male
VWP
VNWP
VWP
VNWP
Non-agriculture
35.5
24.7
39.2
32.7
Own cultivator
14.5
20.6
27.4
41.7
Sharecropper
0.0
1.7
20.6
12.4
Contract cultivator
0.0
0.3
6.1
4.8
Livestock
50.0
52.7
6.7
8.4
Total
100
100
100
100
30
Status of Working Poverty and Presence of Vulnerability by Sector of
Employment in Non-agriculture Sector—HIES 2010
Sector of Employment
WPV
NWPV
Mining and Manufacturing
8.9
7.6
Electricity, gas and water
Construction
0.2
0.2
0.2
0.6
Whole sale, retail, transport and
communication
70.4
71.8
Finance and Business services
0.7
1.9
19.5
17.9
100
100
Community, social and Personal
Services
Total
31
Status of Working Poverty and Presence of Vulnerability by Occupation in Non-agriculture
Sector —HIES 2010
Female
Male
WPV
NWPV
WPV
NWPV
Legislators
Professionals
0.0
0.0
0.7
5.2
1.3
0.5
2.9
2.4
assoc. professionals
Clerk
Service workers and market
sales workers
0.0
-
2.0
-
1.6
0.0
2.8
0.2
29.0
33.8
48.2
56.9
-
-
0.3
0.7
Craft and related trades
Plant and machine
operators
58.1
51.3
9.4
10.9
0.0
2.0
12.8
10.5
Elementary occupations
Total
12.9
100
5.2
100
26.0
100
12.8
100
Occupation
Skilled agricultural
7/17/2015
32
Status of Working Poverty and Presence of Vulnerability by Land ownership
(Rural Only)
PPHS
HIES
Land Ownership by
WPV
NWPV
WPV
NWPV
No land
59.7
40.9
50.5
31.9
Below 2 acre
15.8
14.5
11.2
9.1
2 to 4.99 acre
14.6
19.4
17.1
20.7
5 and above acre
10.0
25.2
21.2
38.2
Total
100
100
100
100
category
33
The Determinants of Vulnerable Working Poverty—Logistic Regression Analysis
HIES
PPHS
Correlates
Odd Ratio
Std. Error
Odd Ratio
Std. Error
Sex (male=1)
0.828*
0.055
1.021
0.110
Age (in years)
0.987
0.009
0.970**
0.012
Age square
1.000
0.000
1.000**
0.000
Education (Illiterate as ref.)
Below Matric
0.476*
0.032
0.625*
0.063
Matric and above
0.236*
0.024
0.625*
0.094
Household size
1.164*
0.007
1.081*
0.010
Occupation (manager, prof. and Assoc. Prof. as ref.)
Sales and Services
4.848*
1.088
3.414**
1.862
Skilled worker
5.197*
1.144
12.698*
6.547
Elementary occupation
1.092
0.253
6.779*
3.520
No. of earner
0.861*
0.0167
1.014
0.022
Land (in acres)
0.954*
0.007
0.970*
0.005
Region (Urban=1)
0.388*
0.030
0.393*
0.054
Sindh/Punjab
0.796*
0.054
3.097*
0.301
KPK/Punjab
0.725*
0.056
0.450*
0.100
7/17/2015
Balochsitan/Punjab
0.227*
0.029
1.537*
0.250 34
The Determinants of Vulnerable Working Poverty—Multinomial Logistic Regression Analysis--HIES
WPV/NWNV
WPNV/NWNV
NWPV/NWNV
Correlates
RRR
Std. Error
RRR
Std. Error
RRR
Std. Error
Sex (male=1)
0.527*
0.039
0.786*
0.052
0.516*
0.025
Age (in years)
0.962*
0.010
1.068*
0.010
0.955*
0.006
Age square
1.001*
0.000
0.999*
0.000
1.001*
0.000
Education (Illiterate as ref.)
Below Matric
0.417*
0.030
0.694*
0.035
0.878*
0.036
Matric and above
0.195*
0.021
0.322*
0.023
0.890**
0.042
Household size
1.273*
0.009
1.246*
0.008
1.085*
0.006
Occupation (manager, prof. and Assoc. Prof. as ref.)
Sales and Services
15.634*
3.539
2.921*
0.326
19.985*
1.476
Skilled worker
15.816*
3.488
2.000*
0.213
18.825*
1.338
Elementary
1.525***
0.354
3.451*
0.349
1.203**
0.097
No. of Earner
0.837*
0.016
0.649*
0.014
1.056*
0.015
Land (in acres)
0.966*
0.008
0.835*
0.013
1.029*
0.003
Region (Urban=1)
0.215*
0.017
0.389*
0.019
0.397*
0.014
Province (Punjab as ref.)
Sindh
0.579*
0.042
0.868*
0.045
0.586*
0.024
KPK
0.583*
0.049
0.897***
0.057
0.728*
0.034
Balochsitan
0.148*
0.020
0.437*
0.031
0.589*
0.031
Constant
0.035*
0.010
0.018*
0.004
0.287*
0.040
N
28,819
7/17/2015
35
The Determinants of Vulnerable Working Poverty—Multinomial Logistic Regression Analysis--PPHS
WPV/NWNV
WPNV/NWNV
NWPV/NWNV
Correlates
RRR
Std. Error
RRR
Std. Error
RRR
Std. Error
Sex (male=1)
1.146
0.129
1.214**
0.112
1.114
0.080
Age (in years)
0.943*
0.013
0.992
0.013
0.957*
0.009
Age square
1.001*
0.000
1.000
0.000
1.001*
0.000
Education (Illiterate as ref.)
Below Matric
0.538*
0.059
0.633*
0.056
0.857**
0.056
Matric and above
0.475*
0.076
0.400*
0.055
0.761*
0.065
Household size
1.140*
0.011
1.165*
0.010
1.046*
0.007
Occupation (manager, prof. and Assoc. Prof. as ref.)
Sales and Services
6.161*
3.390
1.337
0.254
11.052*
2.051
Skilled worker
34.328*
17.836
1.298
0.232
24.585*
4.296
Elementary
10.532*
5.513
1.608*
0.279
6.333*
1.124
No. of Earner
0.949*
0.023
1.036
0.025
1.074**
0.018
Land (in acres)
0.990
0.007
0.836*
0.015
1.043*
0.004
Region (Urban=1)
0.292*
0.042
0.630*
0.055
0.546*
0.036
Province (Punjab as ref.)
Sindh
3.399*
0.354
0.932
0.077
1.214*
0.077
KPK
0.384*
0.088
0.144*
0.025
1.204**
0.106
Balochsitan
1.110
0.190
0.484*
0.076
0.686*
0.070
Constant
0.009*
0.005
0.120*
0.036
0.083*
0.021
N
8876
7/17/2015
36
Conclusions
 In Pakistan, almost all poor households are working
poor.
 Most of the working poor are vulnerable while youth
and households with large family size are facing more
issues of working poverty
 Educational level is inversely related to working poor
class.
 Working poverty rate is high among rural households.
37
Cont…
 Both the HIES and PPHS data shows that about 6-8




percent of the workers are VWP with female share of 2429 percent.
There is more VWP in rural areas overall and among
females.
More educated workers are facing less issues of VWP and
VNWP.
Probability of VWP decline with increase in education
Urban areas have less issues of VWP than the rural areas
38
Policy Recommendation
 There is a need of inclusive growth strategy in Pakistan to
reap the benefits of demographic transition and sustained
growth
 Enhance productive employment and reduction in
poverty through skill development, and assets
 Need of regional balance growth with a focus on rural
areas
39
Thank You
40