Quality versus quantity in health care and educational reforms: combating poverty

Health care and educational reforms, with its emphasis on rewarding quality and cutting costs, could change the landscape of how health care and education is delivered in the developing countries like Pakistan. This study investigate the effects of health indicators (i.e., health expenditure, fertility rate, life expectancy by birth, number of doctors, hospital beds, malnutrition prevalence and mortality rate); education indicators (i.e. primary school enrollment, literacy rate, income inequality); growth factors (i.e. age dependency ratio, GDP, FDI, labor force participation rate, unemployment) on poverty reduction (i.e., headcount ratio) in Pakistan. In order to determine the relationship, this study uses time-series data from 1975 to 2011. Johansen cointegration technique is used to determine long-run relationship while error correction model is used to find short-run dynamics of the model. The results show that there exists a long-run relationship among health, education, economic growth and poverty reduction. In the short-run, there is observed unpredictable change in poverty due to some factors because of inherited inequality factor in the economy. The cumulative impact of all these factors, if financed and monitored accordingly, reduces poverty in Pakistan. In order to reduce poverty, the impact of positive economic trends has to be diversified in poverty hit areas of the state.