industrial policy, its spatial aspects and cluster development in ...

is roughly similar, except that males are 0.06% less likely to be poor than females.
Increase in the number of days worked significantly decreases the probability of poverty
in our sample. All of the components of Table 5.5 together verify the causes of poverty
that has received a great deal of attention in the previous poverty literature and that
gives us a great deal of confidence that the
5.2.5 The effect of spatial inequality in social infrastructure on rural poverty
While current policy attention to human capital accumulation for poverty alleviation in
developing countries is clearly appropriate, the long standing inattention of the
governments in these countries to the effect of distribution of social infrastructure on
poverty has been costly. However, the magnitude of these effects on poverty remains
ambiguous. Therefore, the central question we wish to answer in this part of the report
is straightforward: does spatial inequality in social infrastructure affect rural poverty in
Pakistan?
We examine this relationship by evaluating the impact of principal component postprimary
school system and hospital index. We consider the relationship by estimating
an augmented probit model where in addition to the variables considered in the basic
model we also introduce six factor component education and health indices discussed in
Chapter 4, Section 4.3.3. We rely on district level factor component education and
health indices that are more apt to be exogenous to a household. Because factor
component education and health indices vary across districts and are correlated with
district dummy variables, we do not include district effects in these regressions.
Moreover, all standard errors account for district level clustering and also allow general
form of heteroskedasticity.
The estimation results in Table 5.6, column 1 reveal that improvements in local
education and health facilities do not produce uniform effects on poverty alleviation.
Only principal component post-primary school system & hospital index is negatively
and significantly correlated with rural poverty: an increase in this index by 2.48 (its
standard deviation) decreases the probability of poverty by 1.98%. However, the
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