Journal of Economic Modeling Research

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The lack of social security supports and labor market laws in informal employment has strengthened the expectation that poverty in a family in which the head of the household chooses informal employment is greater than in a family in which the head of the household works in the formal sector. Hence, this study attempts to investigate the effect of informal employment with other factors affecting household’s poverty. To this aim, by using the microdata plan of costs and incomes of urban and rural households in 2018, first, the poverty line was calculated based on 66% of the average annual household expenditures by provincial division for urban and rural areas; and poor households were identified as well. Then, according to the presented index in this study, heads of households' employment types were formally and informally determined. In the primary data processing, a comparison between households with employed heads showed that the highest poverty rates were for households whose heads work in informal employment. Next, the estimation of the research model with the dependent variable limited to the basis of pseudo-panel data and random effects in logistic regression was performed in a separate format for 13248 urban households and 13115 rural households in 31 provinces. The results showed that the informal employment of the head of the households has a direct effect on the possibility of household poverty and the rate of influence in urban areas is higher than in rural areas. Furthermore, the head of the household's education, age, and gender have an indirect effect; and the square number of age and size of the household variables have a direct effect on the probability of household poverty. In such a way that the desired effect of education and age, and the undesired effect of the household dimension on the probability of household poverty in urban areas is greater than in rural areas.

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The aim of this study was to analyze the effect of commodity group expenditures on the probability of urban and rural household poverty in Iran. First, using household expenditure-income data in 1399, the poverty line was calculated based on the method of 66% of the average per capita expenditure, which is higher than urban households than rural households. In the following, the research model is limited by a dependent variable and is estimated based on pseudo-panel data in logistic regression by random effects method. The results showed that the expenditures of the communication group have the greatest impact on the probability of household poverty in urban and rural areas and the impact of this group of goods in urban areas is greater than rural areas. In contrast, hotel and restaurant costs in urban areas have a greater positive effect on reducing the likelihood of household poverty than in rural areas. But the cost of durable goods in urban areas, transportation in rural areas, and the cost of recreation and cultural affairs do not have a significant effect on the likelihood of household poverty. There is also no significant difference between the impact of furniture and household appliances, clothing and footwear and health care in urban and rural areas. Between social characteristics of the household, variables of gender and education have a negative effect on the probability of poverty and variables of household dimension and marital status have a direct effect on the probability of poverty of urban households, but these variables have no significant effect on the probability of poverty of rural households.