Assessing Vulnerability to Poverty: Evidence from Pakistan

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The paper assesses the extent of household vulnerability to poverty in Pakistan. Preferably, household panel data of sufficient length is used to measure the incidence of vulnerability. However this data is rare in developing countries and if available is not nationally or regionally representative. As a second-best option, this study estimates the extent of vulnerability as “expected poverty” using cross-sectional household surveys. The estimates show that about 52 percent population was vulnerable to poverty during 2004-05. The rural headcount ratio in terms of household vulnerability is relatively high as compared to the vulnerability incidence in urban areas. Although monetary poverty has declined during the period 2001-05, the relative incidence of vulnerability has increased from 50 in 2001 to 52 percent in 2005.