There is ample evidence that poverty, which declined rapidly in Pakistan in the 1980s, has returned in the 1990s [Amjad and Kemal (1997); Ali and Tahir (1999); Jafri (1999); Qureshi and Arif (2001)]. Consequently large number of Pakistanis, more than one-third of the total population, live currently far below what can reasonably be regarded as a decent standard of living. Poverty has generally been higher in rural areas than in urban areas. This gap could not be bridged overtime; still the greatest degree of poverty is found in the countryside. To address rural poverty, policy-makers have long been looking to the growth potential of the farm sector of the rural economy. Non-agricultural activities in rural areas have received little attention. This neglect, however, may be socially costly. It has been shown in several recent empirical studies that nonfarm activities occupy an important place in rural economies throughout the developing world [Hazell and Haggblade (1993); Adams and He (1995); Bakht (1996); Sen (1996); Lanjouw (1999)]. They expand quite rapidly in response to agriculture development, and therefore merit special attention in the design of strategies concerning poverty alleviation in rural areas.

Poverty analysis in developing countries including Pakistan has in general focused on poverty trends based on cross-sectional datasets, with very little attention being paid to dynamics—of transitory or chronic poverty. Transitory poor are those who move out or fall into poverty between two or more points of time whereas the chronic poor remain in the poverty trap for a significant period of their lives. The static measures of households’ standard of living do not necessarily provide a good insight into their likely stability over time. For instance, a high mobility into or out of poverty may suggest that a higher proportion of a population experiences poverty over time than what the cross-sectional data might show. 1 It also implies that a much smaller proportion of the population experiences chronic poverty contrary to the results of cross-sectional datasets in a particular year [Hossain and Bayes (2010)]. Thus, the analysis of poverty dynamics is important to uncover the true nature of wellbeing of population. Both the micro and macro level socio-demographic and economic factors are likely to affect poverty movements and intergenerational poverty transmission [Krishna (2011)].

The share of private and NGO schools in primary education has substantially increased over time, though the public sector is still a major player in this area. The present study analyses the factors determining the quality of education offered by the three types of schools and draws policy recommendations for improving primary education in Pakistan. The study compares learning achievement of Class 4 students enrolled in 50 public, private, and NGO schools located across six districts of Pakistan and in Azad Kashmir in terms of their scores in Mathematics, Urdu, and General Knowledge tests. The analysis shows that, practically, there is no gap between public and NGO schools in terms of the test scores of their students. However, a significant test score gap was found between the students enrolled in public and private schools. This gap was largely explained by family background and school-related variables, including teachers’ qualification and student/teacher ratio. However, the performance of private schools was not uniform across districts. In some districts public schools performed even better than private and NGO schools. The findings of this study highlight the need for improving the quality of education in public schools by recruiting more qualified teachers and improving overall supervision. Teacher training is the area where the public and private sectors can benefit by pooling their resources and expertise.

Primary education is at the base of the pyramid of education, and is regarded as a fundamental human right today. In addition, it has several tangible social and economic effects. As an essential component of human capital, primary education plays an important role in the economic growth and development of a country.1 Its impact on several other socioeconomic variables has also been documented in the literature. To quote a few examples, Butt (1984) has found that five or more years of a farmer’s education lead to increased farm productivity, reduced use of farm labour, and increased use of yield augmenting inputs. Azhar (1988) also reports a significant relationship between the number of years of schooling and increase in farm output due to increased technical efficiency. Studies of the rates of returns to education attribute a positive value to the rate of returns to primary education.2 This means that by acquiring primary education one can increase one’s earnings.

There is sample evidence that poverty which declined rapidly in Pakistan in the 1970s and 1980s has increased in the 1990s.1 This rise in poverty is likely to have adversely affected the ability of poor households to enrol their young children in schools. The cost of schooling even when it is free is usually the most pressing obstacles for poor people to send their children in school. Similarly, health correlates strongly with poverty. This does not mean that poverty is itself a direct cause of diseases, but it lies behind other causes of disease such as in-sanitary living conditions, lack of adequate nutrition, poor access to safe drinking water, and sanitation and bad working conditions [World Bank (1993)]. Because of these factors, the poor are more affected by communicable diseases than are the rich. They have also less access to modern health facilities. This paper examines recent trends in poverty and their impact on primary school enrolment, health status and housing conditions in Pakistan.