EVALUATION (15 Nov 2011): This needs only minor revisions for presentation at faculty seminar. The topic is solid, and research seems worthwhile -- here are the few things which should be improved:
Objectives have been stated clearly, but their importance, relevance to policy, and connection to literature has not been clarified.
Thesis will estimate rho - the equivalence scale parameter, and theta - the economies of scale parameter. There should be more lit review of other studies which have done this, and what they have found (and what methodologies they have used).
There are major controversies regarding poverty line, and this has huge impact on determining appropriate policy to fight poverty. There is also relation to the MDG's about poverty. There is government office which is supposed to implement MDG's and they have also gathered relevant data. Connections to policy may be traceable here (or maybe not)
Some of the lit review seems irrelevant -- that is it discusses issues not subjected to research in this proposal. At the same time, some relevant literature is not present. A good review of Poverty in Pakistan is available from my student Taseer's MS Thesis -- [link]
FAMILY COMPOSITION, CHILD WELFARE
AND POVERTY: A CASE STUDY OF PAKISTAN
SUPERVISED BY:
Dr Shujaat Farooq
INTRODUCTION
There is considerable evidence of a positive relationship between household size and poverty (Qureshi and Arif, 2001; Ahmed, 2006; Sharif, 2009). People living in larger families compare to smaller families tend to be poorer as the size of household is directly linked with the distribution of resources needed by a family and larger families tend to have more children staying with parents for a larger time span (Dreze, 1997). However, the existence of family composition which consists of economies of scale and adult equivalence scale in household consumption, asserts that larger families may not always be poorer than smaller families (Meenakshi and Ray, 2001). The tendency of poverty is often associated with certain goods such as water taps, cooking utensils, housing which allows possibilities for sharing cost per person of a given standard of living (Lawjouw, 1995), head education, number of children in family and number of earning member in the family (Deaton and Paxson, 1998). Therefore, there is a need to analyze the family composition as well.
Composition of the household plays an important role in determining the relationship between household size and poverty. Composition is of two types; economies of scale and adult equivalence scale. Economies of scale are fundamental to the measurement of living standards. Living standards for household of different sizes could be equated with lower per capita expenditure for larger households who are able to economize (Lawjouw, 1995). Bulk purchases exist due to shared consumption and price discounts. There are economies of scale at the household level as an additional person in household does employ a lower economic burden with respect to the previous one. Thus the consumption increases at a deceasing rate e.g. the cooking fuel required to prepare food for one person may be more than half of what is needed to cook for two persons (Meenakshi, 2001). Measuring the cost of children, the extent of poverty and poverty thresholds necessitates an accounting for these economies of scale (Trevon, 2007).
Equivalence scale deal with household age and gender and make a possible meaningful comparison between household by assigning different weight to household member in different age and gender. For example the effect of the age of additional child in the household may not imply a similar effect than that of an additional adult. The need of a household grows with each additional member but due to economies of scale, not in a proportional way e.g. a married couple will have an equivalent scale between 1 and 2 that the couple requires more income than a single person living alone, but less than twice that of an individual’s income, to attain the same living standards. The choice of a particular equivalence scale depends on the assumption about economies of scale in consumption as well as on the value judgments about the priority assigned to the needs of different individuals such as children and adult (David .M and Betson, nd).
Poverty has also impact on the child schooling (Ray, 2003). Majority of child laborers come from larger or poor families. The poor household needs money which their children can earn by scarifying their education. The factors which make the parents/head of the households or some other authority to decide about the utilization of child time as the child in the labor market or in school are called supply side. The supply side determinants which keep children away from schooling are various socio-economic variables like poverty, lack of public utilities, lack of educational facilities, population pressure and underemployment of adults etc.
Importance of this Study in Pakistan
In Pakistan, people normally live in large families or under joint family system. The introduction of family composition which consists of economies of scale and adult equivalence scale has a significant impact on the level of poverty. However, the studies done for Pakistan has ignored this phenomena (Ahmed, 2006; Qureshi and Arif, 2001) as observed by Lawjouw(1995).
Table: Incidence of rural and urban poverty and household size in Pakistan
Source: Economic Survey of Pakistan
On the basis of household surveys, these studies have estimated the positive impact of household size on poverty; however, it is evident from basic analysis that Pakistan has succeed to reduce household size overtime with decline in total fertility rates; however poverty remained in fluctuation over various decades; relationship may not hold over time. The existing study has used the functional form however it has not differentiated the economies of scale and adult equivalence scale as done by Lawjouw (1995) using the 1991 Pakistani dataset. Meenakshi (2001) extended the work of Lawjouw (1995) on 1994 Indian dataset by using explicitly arbitrary or parametric approach. The writer additionally considered demographic factors such as female headship, size of land holding and casts system in India and differentiated between economies of scale and adult equivalence scale. He found that large household size allow non-negligible benefits from sharing the cost of goods such as water taps, cooking items, clothing and housing.
The poverty status of a household and family composition has also effect on child schooling (Patrins, 1999). In case of Pakistan poverty status negatively affects the activity of the child to combine school and work. The children from the poor household are 16.5% less likely to combine school and work. So when a Pakistani household falls into poverty, there is tendency for a child to withdraw the activity of combining schooling with work and inter into the activity of work only (Khan and Ali, 2003). In Pakistan children do labor by sacrificing their education, heath, normal development to adulthood and even their lives.
Objectives
The present study will have the following four objectives;
· To estimate Behaviorally Determined Poverty Line (BDPL) by considering economies of scale and equivalence scales;
· To analyze the sensitivity of poverty by using different values of economies of scale and equivalence scale which are sensitive to different household types such as widow head, female headship etc;
· To estimate the determinates of various measurers of poverty by education and gender of household head and by other socio-demographic factors and various household;
· To see the impact of socio economic characteristics on child education statues;
Hypothesis
Hypothesis for this study is built on the question of household size and its impact on poverty.
· Household size has negative impact on poverty;
· Household size and family composition are sensitive to different household types;
· Child education statues is sensitive to poverty level;