Abstract
Using the latest household survey data for Pakistan, this study analyzes the
role of education in determining the extent of earning inequality. Gini indices
of individuals’ earnings are computed for each district and the resulting
district level indices are regressed against the district level indicators of
earners’ education along with a set of other personal characteristics of
earners and district attributes as control variables. The main finding of the
study is that earning inequality is higher among the districts with higher
levels of education and that higher degree of inequality in educational
attainment is a significant factor contributing to earning inequality. The
study concludes that provision of better quality education is important to
raise living standards, while universal access to education is crucial to
ensure equitable distribution of national income.
