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International Research Journal of Finance and Economics ISSN 1450-2887 Issue 52 (2010) © EuroJournals Publishing, Inc. 2010 http://www.eurojournals.com/finance.htm

Does Education Alleviate Poverty? Empirical Evidence from Pakistan
Imran Sharif Chaudhry Associate Professor of Economics. Bahauddin Zakariya University Multan, Pakistan E-mail: [e-mail] Shahnawaz Malik Professor of Economics, Bahauddin Zakariya University Multan, Pakistan E-mail: [e-mail] Abo ul Hassan Ph.D Research Fellow, Department of Economics, Bahauddin Zakariya University Multan, Pakistan E-mail: [e-mail] Muhammad Zahir Faridi Lecturer, Department of Economics, Bahauddin Zakariya University Multan, Pakistan E-mail: [e-mail] Abstract Poverty has become a sensitive and ever remained issue almost in all developing countries of the world. Education plays a vital role in poverty alleviation. Therefore, it is important to investigate that whether different levels of education or literacy cause to alleviate poverty. The major objective of this study is to evaluate the effects of different levels of education and literacy on the incidence of poverty in Pakistan. Our results suggest that poverty alleviation process would be accelerated if resources are targeted at education sector especially in higher education. Pakistan presents a paradoxical situation. Until the late 1980s Pakistan had achieved a spectacular record of economic growth and reduced incidence of poverty remarkably, but the country had horrible social indicators. However when social indicators began to improve in the 1990s for a variety of reasons, both internally and externally driven, the average rate of economic growth declined. Contrary to the said situation, the general perception about Education is that the role of education in poverty alleviation, in close co-operation with other social sectors, is crucial. This paper is mainly intended to explore the reality that to

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