Do SMEs really contribute towards poverty reduction? An empirical analysis to explore the impact of Washing Machine sector on the poverty status of its employees in Gujranwala district

Abstract

 Poverty is a multifaceted phenomenon relying on a number of different social, economic and demographic aspects. An understanding to the true perspective of nature, intensity, and causes of poverty can be considered as a prerequisite for effectual course of action to reduce poverty. The present study attempts to investigate the impact of various socioeconomic and demographic determinants on the poverty status of 517 employees of 322 washing machine producing units operating in Gujranwala District. To estimate the probabilities of being poor, an econometric approach of logistic regression analysis with maximum likelihood estimation has been employed. The factors of household size and persons per room are found to be significantly and positively correlated with the probability of being poor. While skill level of the employee, gender of household head, average household educational points, physical assets, agricultural income housing ownership, availability of medical facilities, nature of housing structure, sources of drinking water, nature of sanitation system used, availability of  sui gas, gross primary school enrollment rate, satisfaction regarding present job  along with participation rate are found to be negatively and significantly associated with the probability of being poor. SMEs are also found to have a negative impact on the probability of being poor, adding positively to the argument that SMEs in this case are really contributing to enhance the living standard of its workers