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Does Inequality Matter for Poverty Reduction? Evidence from Pakistan’s Poverty Trends

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  • Haroon Jamal

    (Social Policy and Development Centre, Karachi.)

Abstract

The paper explores the linkages between poverty, growth and inequality in the context of Pakistan. Time series macro data are used for the period 1979 to 2002. Consistent poverty and inequality measures are interpolated to facilitate the estimation of poverty elasticity with respect to growth and inequality in a multivariate regression framework. The paper also attempts to find out macroeconomic and structural correlates of inequality. The empirical findings—high poverty elasticity with respect to inequality measures—confirm the importance of inequality in poverty reducing effort. Inflation, sectoral wage gap, and terms of trade in favour of manufacturing exacerbate inequality, while progressive taxation, investment and development expenditure on social services play a significant role in reducing inequality. The results also indicate a positive correlation between per capita GDP and income inequality.

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File URL: http://www.pide.org.pk/pdf/PDR/2006/Volume3/439-459.pdf
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Bibliographic Info

Article provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.

Volume (Year): 45 (2006)
Issue (Month): 3 ()
Pages: 439-459

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Handle: RePEc:pid:journl:v:45:y:2006:i:3:p:439-459

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Related research

Keywords: Pakistan; Poverty Trend; Income Distribution; Poverty Elasticity with respect to Growth and Inequality;

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  1. Adams, Richard Jr., 2004. "Economic Growth, Inequality and Poverty: Estimating the Growth Elasticity of Poverty," World Development, Elsevier, vol. 32(12), pages 1989-2014, December.
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Cited by:
  1. Khalid Zaman & Bashir Khilji, 2014. "A note on pro-poor social expenditures," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(4), pages 2121-2154, July.
  2. Wannaphong Durongkaveroj and Rossarin Osathanunkul & Rossarin Osathanunkul, 2013. "Regional multipliers of social accounting matrix and the effective eradication of poverty," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 2(4), pages 39 - 52, December.
  3. durongkaveroj, wannaphong, 2014. "Growth or development: experience from Latin America," MPRA Paper 54481, University Library of Munich, Germany, revised 16 Mar 2014.
  4. Majeed, M Tariq, 2011. "Trade, Poverty and Employment: Empirical Evidence from Pakistan," MPRA Paper 45077, University Library of Munich, Germany.
  5. Muhammad Chani & Sajjad Jan & Zahid Pervaiz & Amatul Chaudhary, 2014. "Human capital inequality and income inequality: testing for causality," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(1), pages 149-156, January.
  6. Amber, Fatima & Muhammad, Shahbaz & Faridul, Islam, 2012. "Nexus of trade, investment and poverty: evidence from Pakistan," MPRA Paper 39068, University Library of Munich, Germany, revised 20 May 2012.

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