Personal Earnings Inequality in Pakistan: Findings from the HIES 1993-94

Zafar Mueen Nasir, Riaz Mahmood


The earnings of workers play important role in the well-beings
of households’ as they account for the largest proportion of total
household income. If earnings of workers are distributed unevenly, they
contribute significantly to the inequality in the household earnings. It
may not be a cause of serious concern if income inequality grows and
income of the workers also grows throughout the population and the
position of the bottom segment improves. It is however serious when gap
between rich and poor increases by worsening the position of poor. To
reduce the household income inequality it is therefore important to
focus on the distribution of personal earnings and frame a policy. There
are many cause of inequality in personal earnings. As workers income
rises at varying rates, it may reflect the decision of household of
their investment in human capital and decisions to acquire skills. The
factors like education, occupation, gender, regional location, sector of
employment, and non-market forces such as discrimination may also play a
significant role in the distribution of earnings.

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