Income Inequalities among Earners Engaged in Selected Occupations and Professions in Pakistan

Abstract

The current study investigates income inequalitiesamong earners engaged in different occupationsand professions in Pakistan using HIES data for 2010-11 and2015-16, focusing on their yearly income. Income equation anddifferences of income between subgroups of the population areestimated by using the OLS method. The generalized Entropy(GE) Class method is employed to evaluate the contribution ofdifferent subgroups of household characteristics and differentincome sources in overall inequality. The regression-baseddecomposition method is used to assess decompose changes inincome inequality by various socio-economic factors. OLSestimates conclude that all variables play a significant role inexplaining the differences in income. All indices of GE methodindicate that inequality within the group is a greater problemthan inequality experiences between groups. The decompositionmethod shows a positive sign of inequality decomposition for mosthousehold characteristics and income sources which depicts thatthese determinants have greatly contributed to overall incomeinequality.