Poverty, Income Inequality and Growth Nexus in Pakistan

In order to find trend in poverty different techniques are employed by different authors resulting in no clear cut outcome in Pakistan. The same story is about inequality estimation. It is necessary to quantify the roles of growth and income redistribution towards changes in poverty in the short and long run. It is also necessary to know whether the growth is pro-poor or not. This study employed the same technique to find poverty,inequality and growth estimates from 1993 to 2006. Rural area experienced more poverty as compared to urban area throughout the period,whereas the results of inequality showed an opposite story. During some periods growth was dominant over adverse income redistribution while for the other years story was opposite to it. For headcount ratio the growth was not pro-poor. Poverty is inversely related with age,education,foreign remittances,sewing machine,livestock and owned land, while it is positively associated with household size. There is positive relationship between inequality and growth. Net elasticity of poverty to growth is less than the gross elasticity of poverty to growth. This study should help the government in tackling poverty and inequality problems.