EFFECT OF HUMAN CAPITAL DEVELOPMENT ON POVERTY IN KENYA

Abstract

Purpose: The purpose of this study was to determine the effect of human capital development on poverty in Kenya.

Methodology: Causal research design was used in this study. The study adopted a non-probabilistic sampling technique and in particular purposive sampling technique. The study used secondary data sources for analysis. The study used time series data for the year 2005 to 2015 for WDR and HDI from World Bank and UNDP respectively for Kenya. The data collected was in soft copy because the study used the secondary data collection method. The data was extracted from data repositories of the World Bank and UNDP. Data analysis involved both descriptive and causal analysis to answer the research questions. The Inferential analysis used Ordinary Least Squares (OLS) Regression model in establishing the relationship between the dependent and independent variables

Results: The study found prevalence of HIV, expected years of schooling and roads paved of total roads to be statistically significant but improved water source wasn't statistically significant at 5 percent level. The study also found negative correlation between poverty expected years of schooling, improved water source and roads paved of total roads and positive correlation between poverty and prevalence of HIV.

Recommendations: The study recommends improvement in education outcomes with the aim of alleviating poverty in Kenya. Since poverty was poverty negatively correlated with poverty, the government and its development partners should design interventions that aim at improving education outcomes. This will in, turn, improve welfare of poor individuals through increased wages and positive externalities on health outcomes. Both attendance and literacy are critical aspects of education outcomes hence the need to have a quantity quality trade-off.

Keywords: health, education, access to water and sanitation, access to infrastructure, poverty