n Journal of Emerging Trends in Economics and Management Sciences - Does education reduce poverty in rural households?

Volume 6, Issue 7
  • ISSN : 2141-7024
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Qualitative education equips people from poor families with literacy, numeracy and problem solving skills, and lifts them out of poverty. This study presents empirical link between non-formal, primary, secondary, tertiary education and poverty using quantitative poverty assessment measure. Through the multi-stage sampling technique, 150 rural households were selected and primary data were obtained with the aid of questionnaire. Foster, Greer, Thorbecke quantitative poverty measure was employed to decompose and analyse the data. Result of analysis showed that the incidence of poverty was highest (61 percent) among household heads with no formal education and lowest (35 percent) among household heads with tertiary education. Findings also revealed that poverty gap and squared-poverty gap decreased with higher educational attainment. A test of difference in the poverty incidence of households heads without formal education versus secondary and tertiary education; and primary education versus secondary and tertiary education were significant (p<0.01). Results showed that the incidence of poverty is largest among the illiterate households and declines consistently by increasing level of education. Results suggest that the incidence of poverty among households is strongly influenced by educational levels. Enhancing educational and training opportunities as a pathway out of poverty is a sensible policy option.

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