Human capital, poverty, and income distribution in developing countries , Minh Quang Dao Carleton University, Ottawa.
Summary of Key Findings: "Human Capital, Poverty, and Income Distribution in Developing Countries" by Minh Quang Dao
Purpose of the Study
The research examines how components of human capital influence poverty and income distribution in developing countries. Using data from the World Development Reports (2006, 2007) and applying multivariate regression models, the study identifies key determinants of poverty and income inequality.
Methodology
Data Source: World Bank data from a sample of 40 developing economies for poverty analysis and 35 countries for income inequality analysis.
Statistical Approach: Least-squares regression, including interaction terms between income and human capital components to enhance statistical accuracy.
Key Findings
Determinants of Poverty
Poverty is significantly influenced by:
Gender parity in primary and secondary education (Higher gender equality is linked to lower poverty rates).
Child malnutrition (Higher malnutrition correlates with increased poverty).
Per capita Gross National Income (GNI) in Purchasing Power Parity (PPP) (Higher income levels reduce poverty).
Maternal mortality rate (Higher maternal mortality increases poverty).
Births attended by skilled health staff (Greater access to skilled birth attendance reduces poverty).
Determinants of Income Inequality
Income inequality is impacted by the same variables as poverty, with additional factors:
Infant mortality rate (Higher infant mortality worsens income inequality).
Primary school completion rate (Higher completion rates contribute to reduced income inequality).
Role of Human Capital
Education & Gender Parity: Increasing educational opportunities for women is critical for reducing poverty and inequality.
Health & Nutrition: Improved maternal and child healthcare services lead to lower poverty and better income distribution.
Income Growth: Economic development reduces poverty and may contribute to income equality.
Interaction Effects
Including interaction terms between income and human capital components improves the accuracy of statistical models.
Higher income tends to amplify the positive effects of education and healthcare on poverty and income distribution.
Policy Recommendations
Invest in Female Education: Governments should implement policies promoting gender parity in education to reduce poverty and inequality.
Enhance Maternal & Child Healthcare: Expanding healthcare services for pregnant women and infants will lower poverty rates.
Combat Child Malnutrition: Reducing malnutrition should be prioritised as it directly affects poverty levels.
Reduce Infant Mortality: Public health initiatives targeting infant care can lessen income inequality.
Expand Primary Education: Increased primary school completion rates contribute to a more equitable income distribution.
Encourage Economic Growth: Sustainable economic growth can alleviate poverty and lead to a fairer distribution of wealth.
Conclusion
The study highlights the strong interdependence between human capital and economic well-being in developing nations. Improving education, healthcare, and income levels collectively enhances poverty reduction and income equality. Strategic government interventions in these areas can drive sustainable economic development.