Role of Circumstances in Inequality of Opportunity in Pakistan

Abstract

This study estimates lower bounds for the opportunity share of inequality in labor earnings for four provinces of Pakistan i.e., Punjab, Sindh, KPK and Balochistan using Pakistan Social and Living Standards Measurement Survey (PSLM) of 2005-06 and 2010-11. Father’s education, mother’s education, father’s occupation, region of residence, and gender has been used as the circumstance variables. Labor earnings are the outcome variable that is measured on an individual basis as monthly earning from all occupations, including monetary value of in-kind payments. Results found that the decline in inequality of opportunity between two periods is highest in case of KPK followed by Punjab, Sindh and Balochistan province. The concept of inequality of opportunity demands to target the deprived segments of the society depending on their regional requirement. The four provinces of Pakistan are different from their geographic, societal norms, family system etc. and every province needs such policy that is relevant to its needs. The results found that in case of Punjab province gender is the highest contributor towards in equality of opportunity. In case of Sindh the region of residence is the major contributory factor towards inequality of opportunity followed by gender of the individual. In KPK and Balochistan the father’s educational level and father’s occupation are the major factors that affect inequality of opportunity negatively. The need of the time is to target policies based on the geographical needs, one size fit for all is not too much effective to control the problem of inequality of opportunity that leads to certain inequalities i.e. income inequality, educational inequality etc.