ABSTRACT
This chapter looks into the recent evolution of income as well as non-income inequality in Pakistan, paying particular attention to consistency in making comparisons over time. It examines key driving forces of changing inequality in Pakistan. The chapter describes stock of the policy actions that the government is taking to address the issue of inequality, draw policy lessons, and provide recommendations for future policy actions in pursuing an inclusive growth strategy. The Government of Pakistan's Economic Survey and the Planning Commission provided more detailed estimates of inequality in the 2000s, based on per adult-equivalent household consumption expenditure data. Household survey data show that inequality in literacy rates across consumption deciles is high in Pakistan. Technological change could be biased in favor of capital and thus will increase inequality as capital income is less equally distributed than labor income. Globalization and trade liberalization can affect growth and income distribution through a variety of channels.
