How Inclusive is Growth in Pakistan? A Multilevel Analysis over 20 Years
Rafi Amir-ud-Din*
Sajid Amin Javed**
Muhammad Muzammil***
The concept of inclusive growth has received considerable attention in recent years because of rising economic and non-economic inequalities despite significant Gross Domestic Product (GDP) growth. The most important inequalities which matter for economic growth are access to education and gainful employment opportunities. The relationship between inequality and stifled economic growth is often mediated by a complex interaction of poverty, political instability and social fractionalization. Conversely, inclusive growth ensures equitable access to available opportunities which provides enabling environment to everyone to participate in the growth process. Using data from three waves of Pakistan Social and Living Standards Measurement (PSLM) 1998, 2005 and 2014, this study assesses the extent of inclusiveness of growth in education and employment opportunities in Pakistan disaggregated at the provincial level. The study develops an Equitable Opportunity Index (EOI) which evaluates access to education and employment opportunities. The EOI is used to track the changes in access to education and employment opportunities over a period of 20 years. A robustness analysis is done using alternative measures of education and employment to see how a change in the definition of education and employment affects the extent of inclusive growth in Pakistan.
* Dr Rafi Amir-ud-Din is affiliated with COMSATS Institute of Information Technology, Lahore, Pakistan.
** Dr Sajid Amin Javed is Research Fellow at the Sustainable Development Policy Institute (SDPI), Islamabad, Pakistan.
*** Mr Muhammad Muzammil is affiliated with COMSATS Institute of Information Technology, Lahore, Pakistan.