Poverty, Vulnerability, and Welfare Insecurity in Khyber Pakhtunkhwa, Pakistan: Evidence from Nine Rounds of Household Survey Data, 2004–2025

Abstract

Analysing poverty as a static state of current deprivation is not sufficient. It is necessary to study it as a dynamic process shaped by deep-rooted problems in the economy and exposure to shocks. This study offers the first long-term (2004-05 to 2024-25) combined analysis of poverty and vulnerability to poverty in Khyber Pakhtunkhwa (KP), Pakistan. The headcount ratio and Chaudhuri’s (2003) methodology employing Feasible Generalized Least Squares (FGLS) are employed. Official poverty lines calculated by the Planning Commission of Pakistan are used for 2004-05 to 2018-19, whereas for round 2024-25 poverty line (Rs.8,483.90) calculated by the author is employed. The study examines a wide set of household characteristics.  Poverty estimates for 2004–05 to 2018–19 are reproduced from Jan, Ullah and Saeed (forthcoming) with permission. All vulnerability estimates and the 2024–25 poverty estimates are original to this study. Results show a noticeable decline in poverty and vulnerability until 2015-16, followed by a reversal in 2018-19 which continued until 2024-25 mainly associated with the worsening economic situation, volatility, burden of newly merged districts. Rural landless households, agricultural labour, sharecroppers, large households, and those where the household head has low education consistently show the highest current and future deprivation risks. The findings emphasize that poverty in KP is rooted in persistent asset deficits, demographic pressures, and insecure livelihoods. The study provides a strong empirical foundation for shock-responsive social protection, human capital investments, and asset-building strategies aimed at reducing long-term vulnerability and achieving durable poverty reduction in shock-prone regions.