UNVEILING THE INFLUENCE OF POVERTY ON URBANIZATION: AN EXHAUSTIVE EXPLORATION AND ANALYSIS

Abstract

This study investigates the impact of poverty on urbanization in Pakistan, using secondary data from the World Development Indicators (WDI) database. It explores the relationship between urbanization and key factors such as poverty rate, population growth, inflation, GDP growth rate, foreign trade, education expenditure, urban population, unemployment rate, and trade in services from 1990 to 2024. The Autoregressive Distributed Lag (ARDL) model is used for analysis. The findings show both positive and negative effects on urbanization. High poverty rates hinder urbanization due to a lack of infrastructure, while inflation negatively affects urbanization by eroding purchasing power and discouraging investment. In contrast, population growth, foreign trade, economic growth, and education expenditure positively influence urbanization, as these factors foster a more open economy, better education, and increased opportunities. Additionally, a growing urban population and the expansion of service sectors further drive urbanization. The study recommends policies to prioritize GDP growth, reduce poverty, stabilize inflation, and promote sustainable urban infrastructure to support balanced and long-term urbanization in Pakistan.