EXPLORING THE SOCIOECONOMIC CAUSES OF INCOME INEQUALITY IN PAKISTAN: A REGIONAL, GENDER, AND PROVINCIAL DECOMPOSITION ANALYSIS

Abstract

Poverty and income inequality are features of every society. In Pakistan, poverty and income inequality are most obvious, therefore, their measurement and analysis deserve claim on our attention. The objective of this study is to decompose total income inequality in Pakistan into within-group and between-group inequalities, focusing on regional (rural-urban), gender (male-female) and provincial disparities across the four provinces of Pakistan. The data used for this study is obtained from Pakistan social and living standards measurement survey 2014-15. We have concentrated on decomposability of income by subgroups of population, The findings shows that the highest part of total income inequality is explained by between inequality means how income vary between the groups, while the lowest part is explained by within inequality means how income distribution varies within each group for region, gender and provinces. The province experience high income inequality such as in province Balochistan, experienced the value of between income inequality is estimated 91.58%.  Province Punjab the rate of income inequality is lowest 52.08% as compare to province Balochistan. Thus according to inequality we have observed different levels of income inequality. The study finds that due to differences in region, gender, and provinces causes increase in income inequality. These differences come into existence due to lack of proper planning from the government side, causes low health facilities, poor educational system, low infrastructure, low employment opportunities and low economic growth. Findings of the study recommend that government should take measures to improve basic facilities, quality of education, employment opportunities and health facilities in remote areas of Pakistan to alleviate poverty and reduce income inequality in the region.