On measuring inclusiveness of growth in Pakistan.
Asghar, Saima ; Javed, Sajid Amin
Using social opportunity function approach, this work assesses,
firstly, the change in and access to education and employment
opportunities available to the population and secondly, how equitably
these opportunities are distributed, Opportunity Index (OI) and Equity
Index of Opportunities (EIO) are calculated to measure and quantify the
extent of progress made in these two most important socio-economic
components of development. Based on data, extracted from Pakistan Social
and Living Standards Measurement (PSLM) Surveys of 1998-99 and 2007-08,
the present work finds that growth process has resulted in increased
inequalities both in education and employment opportunities over the
study period. Average opportunities available to population increased
for education while a decline in average employment opportunities is
documented in 2007-08 as compared to 1998-99. OI registered an increase
for primary and secondary levels of education. EIO improved at primary
level, remained stagnant for secondary level and decreased for literacy
rate over the time. Moreover, EIO for employment opportunities,
suggesting equitable distribution for employment and paid employment,
registered a decrease and opportunities distribution turn inequitable
when calculated based on average monthly income earned. Findings of the
paper suggest that policies should be focused to actively engage the
marginalised groups of the society in growth process through improvement
in higher education and more equitable distribution of opportunities.
JEL classification: C46, D63, E24, I24, O12
Keywords: Inclusive Growth, Inequality, Opportunity Curve,
Opportunity Index, Equity Index of Opportunities, Pakistan
1. INTRODUCTION
Increasing level of inequalities in societies has diverted the
attention of policy makers towards the new development paradigm of
"Inclusive Growth" across the developing world especially.
Despite the achievement of reduction in extreme poverty 60.3 percent of
the population still lives under $2-a-day poverty line in Pakistan. Gini
coefficient increased from 30.3 percent (1993), to 33 percent (2006) (1)
indicating that growth has been uneven and the gap between haves and
have-nots widened over the time. A small segment of the population is
benefiting fruits of growth to a large extent leaving large segment of
the society deprived of basic needs; 51 percent of the population is
suffering from severe deprivation of education and 29 percent with
health. (2) The prevailing inequalities in Pakistan have resulted in
31.5 percent (3) loss in human development which could have been
improved otherwise. Different socio-economic indicators show that the
disadvantage groups including poor, people living in rural areas have
not benefited proportionally from economic growth. (4) Income
inequalities can hamper the growth through lowering the impact on
poverty reduction of a given rate of growth, and thereby reduce the
growth. Furthermore inequalities can operate through political
(in)stability and social cohesion channels to dissuade economic growth
[Ali and Son (2007)]. In this back drop, reducing inequalities has
become a major concern of development policy across the globe especially
so for developing countries generating interest in inclusive growth.
Inclusive growth ensures fair and equal access to all stratum of
society, including disadvantaged and marginalised, to opportunities
created [Ali and Son (2007)].
Creation of economic opportunities and ensuring equal access to
opportunities by all groups of society is essential and prerequisite for
socio-economic development. An enabling environment is a pre-condition
to allow all individuals to equally participate with growth process.
Equity in the provision of public services particularly education,
health and employment opportunities is required failing to which can
worsen the situation. In last two decades the economic growth achieved
in Pakistan has not been successful in engulfing the poor-rich gap and
resulted in ever increasing inequalities. Until the fruits of
development are not shared with and by all segments of society
sustainable development, with its ultimate objective of poverty
reduction, cannot be achieved. In recent years, Pakistan has increased
its pro-poor expenditures to improve health, and education conditions,
with major focus on skill development for productive labour force, and
provide social safety net to the vulnerable groups. (5) Different
policies and programmes are in progress to achieve these objectives.
Consistent with the definition and measurement approach of inclusive
growth adopted by "Ali and Son" this study aims to assess the
inclusiveness of growth in context of education and employment
opportunities, and evaluate equity thereof, in Pakistan using
cross-sectional data from Pakistan Living Standards and Measurement
Survey (PLSM) for the period 1998-99 and 2007-08. The study empirically
evaluates the change in and access to both education and employment
opportunities available to the population and how equitably these
opportunities are distributed. We find that growth process has increased
the inequalities both in education and employment opportunities over the
study period. Average opportunities available to population increased
for education while a decline in average employment opportunities is
documented in 2007-08 as compared to 1998-99. Equity Index of
Opportunities (EIO) improved at primary level, remained stagnant for
secondary level, and decreased for literacy rate over the time.
Moreover, EIO for employment opportunities, suggesting equitable
distribution for employment and paid employment registers a decrease and
turn inequitable when calculated based on average monthly income.
The concept of inclusive growth has not been a part of much
academic debate in Pakistan therefore this study draws the attention of
policy makers towards the new development paradigm which focuses on
income as well as non-income dimensions of progress for poverty and
inequality reduction. The findings of this work will provide the basis
to gauge the overall opportunities generated in last decade. It will
assist to; identify the problem of current growth process which has
increased the inequality, so that targeted policies could be designed
for efficient allocation of resources. Rest of the paper is organised in
five sections wherein Section 2 lays conceptual foundation of inclusive
growth while Section 3 provides literature review. Data and Methodology
adapted to measure inclusive growth is discussed in Section 4 and
Section 5 furnishes empirical illustration. Section 6 concludes the
paper and draws some policy implications.
2. INCLUSIVE GROWTH--THE CONCEPT
Nevertheless there is no agreed and common definition of inclusive
growth; the concept however, is understood to refer to "growth
coupled with equal opportunities." Inclusive growth is one which
emphasises that economic opportunities created by growth are available
to all, particularly the poor [Rauniyar and Kanbur (2009)]. Growth will
be inclusive when the benefits will reach to poor, marginalised and
socially excluded groups in any society. It should bring social
development and empower the weaker groups in the society to gain access
to assets and opportunities. Equitable distribution of assets and
opportunities leads to sustainable economic growth and ultimately result
in reduction of poverty and inequality. The new development approach of
inclusive growth emphasise that, for poverty reduction, public policies
should focus on multidimensional approach which expands socio-economic
opportunities as well as ensures equal access of all segments of society
to these opportunities under the framework of accelerated economic
growth [Naqvi (2010)]. It not only considers the pace but also the
pattern of growth simultaneously.
Inclusive growth aims on ensuring that the economic opportunities
created by growth are available to all, particularly the poor, to the
maximum extent possible (Asian Development Bank). While United Nations
Development Programme (UNDP) emphasised inclusive growth as growth with
low and declining inequality, economic and political participation of
the poor in the growth process, and benefit-sharing from that process.
Inclusive growth involves a long term perspective and focuses on
generating decent employment in order to increase the income of excluded
groups [Ianchovichina and Lundstrom (2008)]. Growth allowing every
individual (group) of society participate in, and contribute to the
growth process on an equal footing regardless of their individual
circumstances is called to be growth with inclusiveness [Ali and Zhuang
(2007)].
3. LITERATURE REVIEW
Inclusive growth has become an important development policy of many
developing countries. Different definitions and measurement concepts of
inclusive growth exist in the literature, Stephan Klasen (2010), defines
inclusive growth as non-discriminatory and disadvantage-reducing growth,
which focuses on two characteristics; one on process, in the sense that
the actual growth include many people who participate in growth (i.e.
inclusive growth is based on inputs from a large number of people),
second; on outcomes of the growth process (i.e. inclusive growth
benefits many people). The author argues that inclusive growth adds much
beyond the existing pro-poor growth concepts. According to author
"income growth is inclusive when it; allows participation and
contribution by all members of society, with particular emphasis on the
ability of the poor and disadvantaged to participate in the process of
growth (the non-discriminatory aspect of the growth), and associates
with declining inequality in non-income dimensions of wellbeing that are
particularly important for promoting economic opportunities, including
education, health, nutrition, and social integration (the
disadvantage-reducing aspect of inclusive growth)".
Rauniyar and Kanbur (2009) conclude that a growth that is
accompanied by declining income inequality is inclusive in nature. The
authors highlighted different factors essential for inclusive growth and
development including; sustainable and equitable growth that is
broad-based across sectors and regions creating more employment
opportunities for poor and vulnerable groups, improved quality of
infrastructure, rural infrastructure and agricultural technologies to
provide rural population economic opportunities, social protection for
disadvantaged groups, legal identity, capacity building, rule of law and
enabling environment for business and investment and public private
partnership to promote equity and inclusiveness.
Lanchovichina and Lundstrom (2008) asserts that sustainable growth
should be broad-based across sectors and inclusive of the vast majority
of country's labour force. This concept of growth focuses on
productive employment as a means of increasing incomes of excluded
groups rather than on direct income distribution. The authors applied
inclusive growth analytics to Zambia and conclude that poor education
and health, access to capital and credit, infrastructure and government
failure are the constraints to productive employment and inclusive
growth.
Yoko (2009), focus on gender dimensions of growth process and
concludes that despite the improvement in education, and to some extent
health outcomes, women's improved capabilities are not translated
into an equal participation between men and women in economic and
political activities. Gender gaps in access to resources and
opportunities remain significant particularly in South Asia, which are
caused and reinforced by interlinked cultural, social, and economic
factors. Based on empirical evidence the author argues that; educating
public, enforcing antidiscrimination legislations, promoting economic
development to generate economic opportunities and improving
women's capabilities and access to the opportunities, are the key
ingredients for greater progress toward gender equality and inclusive
growth.
Mendoza and Thelen (2008), point out the barriers that poor people
face in accessing and actively participating in markets as producers and
consumers. Lack of access to credit, limited investment in human
capital, including skills and entrepreneurship training, and
geographical obstacles, according to authors, can be major causes of
exclusion of the poor people from labour and various product markets.
The paper also describes the role of markets in promoting economic
growth and its benefits to those who are able to access and participate
successfully.
Ali (2007) establishes higher demand of coupled with higher wages
for skilled workers backed by rising importance of new technologies and
foreign direct investment has resulted in increased income inequalities
in Asia over the time. Further, according to author, with the decline in
effective delivery of public services non-income inequalities have also
risen. Creation of economic, social and political opportunities, equal
access to opportunities and provision of social protection scheme to the
vulnerable groups will promote inclusive growth in the region. The
author also emphasised the importance of measuring inclusive growth in
term of average opportunities available and distribution of these
opportunities.
Ali and Son (2007), in a very influential work, examined that to
what extent social opportunities are distributed across different income
groups and how this distribution changes over time. The originality of
paper lies in devising methodology to measure inclusive growth. This
approach relies on a social opportunity function, similar to the idea of
a social welfare function. Growth is considered inclusive, according to
authors, if it increases the social opportunity function, which in turn,
depends on two factors namely average opportunities available to the
population, and how equitably these opportunities are shared among the
population. This paper also provides empirical application of the
proposed approach to Philippines to analyse the access to and equity of
opportunities in education and health facilities. The authors conclude
that government health facilities are more utilised by the people at the
lower income distribution, whereas private health facilities which are
superior in quality tend to be highly inequitable in favour of rich.
Further primary and secondary level education opportunities are more
inequitable over the time period 1998 to 2004.
Ali and Zhuang (2007), emphasise that inclusive growth is not based
on a redistributive approach but its goal should be the high and
sustainable growth to create productive and decent employment
opportunities as well as social inclusion to ensure equal access to
opportunities. Further the authors emphasised that social inclusion
could be achieved by investing in education, health and other social
services to enhance human capacities, promoting economic and social
justice and provision of social safety nets to prevent extreme
deprivation.
4. DATA AND METHODOLOGY
Cross-sectional data from Pakistan Social and Living Standards
Measurement Survey (PSLM) 1998-99 and 2007-08 is used to gauge the
inclusiveness of Growth in Pakistan. Baseline comparison will be made
with the 1998-99 dataset. PSLM survey provides various micro level
household based socio-economic indicators including education,
employment, health, income, expenditure etc. These two datasets provide
information of more than, 16000 (1998-99) and 15000 (2007-08)
households, from all over the Pakistan including urban and rural areas
of the four provinces and Islamabad; however military restricted areas
are not included in the surveys. Based on Ali and Son (2007) measurement
approach a social opportunity curve and index is calculated for 1998-99
and 2007-08 PLSM data to gauge access to education and employment
opportunities. The idea of a social opportunity function is similar to
social welfare function. It states that inclusive growth leads to the
maximisation of social opportunity function and growth inclusiveness
could be measured in terms of increasing the social opportunity
function, which depends on two factors: (i) average opportunities
available to the population, and (ii) how the available opportunities
are shared or distributed among the population. This social opportunity
function gives greater weight to the opportunities enjoyed by the poor:
the poorer a person is, the greater the weight will be. Such a weighting
scheme will ensure that opportunities created for the poor are more
important than those created for the non-poor i.e., if the opportunity
enjoyed by a person is transferred to a poorer person in society, then
social opportunity must increase making growth more inclusive.
Suppose there are n persons in the population with incomes
[x.sub.1], [x.sub.2], ..., [x.sub.n], where [x.sub.1] and [x.sub.n] are
poorest and richest person respectively. Social opportunity function
then, based on social welfare function, can be defined as:
O = O([y.sub.1], [y,sub.2], ..., [y.sub.n]) (1)
Where [y.sub.i] is the opportunity enjoyed by the ith person who
has income [x.sub.i] and where [y.sub.i] can take binary values of 0 and
100 indicating that ith person is deprived of or enjoys a certain
opportunity respectively. The average opportunity for the population is
then defined as:
[bar.y] = 1/n [[summation].sup.n.sub.i=1] yi (2)
It also represents the percentage distribution because [y.sub.i]
takes the binary values of 0 and 100. This idea will be operational if
the problem is formulated in continuous distribution. Suppose the
population is arranged in ascending order of their incomes and
[[bar.y].sub.p] is the average opportunity enjoyed by the bottom p
percent of the population, where p varies from 0 to 100 and y is the
mean opportunity available to whole population, then [[bar.y].sub.p]
will be equal to [bar.y] when p = 100 (which covers the whole
population). As [[bar.y].sub.p] varies with p, a curve [[bar.y].sub.p]
could be drawn for different values of p, which is a concentration curve
of opportunity when the individuals are arranged in ascending order of
their incomes called the opportunity curve. The higher the curve, the
greater is the social opportunity function. The index calculated based
on area under the opportunity curve will capture then magnitude of the
change in opportunity distributions.
[[bar.y].sup.*] = [[integral].sup.1.sub.0] [[bar.y].sub.p] dp (3)
[[bar.y].sup.*], in Equation 3, is proposed opportunity index
(hereafter OI) where the greater value of [[bar.y].sup.*] denote that
opportunities available to population are greater. If everyone in the
population enjoys the same opportunity then [[bar.y].sup.*] should be
equal to y but deviation of [[bar.y].sup.*] from y provide the
distribution of opportunities across the population. Thus based on the
assumptions of the opportunity curve an equity index of opportunity
(hereafter EIO) is also proposed which could be determined as:
[MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] (4)
In order to achieve inclusive growth [[bar.y].sup.*] should be
increased over time and to understand the dynamics of inclusive growth
both sides of equations are differentiated
[??] d[[bar.y].sup.*] = [phi]d[bar.y] + [bar.y]d[phi]
(Differentiating both sides) (5)
Here d[[bar.y].sup.*] measures the change in the degree of growth
inclusiveness while [phi]d[bar.y] is the contribution to inclusiveness
of growth by increasing the average opportunity in the society when the
relative distribution of the opportunity does not change, [bar.y]d[phi],
in Equation 5, denotes the contribution of changes in the distribution
when the average opportunity does not change. (6) Access to and equity
of education and employment opportunities and how this access and equity
of opportunities has changed over time in Pakistan is assessed by
employing the above given methodology.
5. EMPIRICAL ILLUSTRATION
Empirically, inclusiveness of growth can be measured by two
approaches; (i) partial approach which is derived through
"opportunity curve" and; (ii) full approach in which a
quantified index is calculated from the area under the opportunity
curve. In first approach slope of the opportunity curve determines that
either opportunities are distributed equitably or inequitably among the
population at a given point in time. If the curve slopes downward, it
suggests that opportunities are equitably distributed among the
population, i.e. lower income groups of the population have more
opportunities than the groups with higher level of income. Whereas an
upward slope of the curve suggests that distribution of opportunities is
inequitable and population with higher level of income have more
opportunities. Further if the curve shifts upward over the time period
at all levels of income distribution then growth is considered
inclusive. Partial approach determines the pattern of growth only.
However in order to quantify the precise magnitude of the change in
distribution of opportunities and equity level over time this work also
employs second approach and O1 is calculated. The greater value of OI
shows greater level of opportunities available to population hence
inclusive growth.
In order to assess the equity of education and employment
opportunities over the time period of 1998-99 to 2007-08 following
section provides the results determined through both measurement
approaches, i.e., partial and full approach. The calculations presented
are based on statistics calculated from datasets provided by PLSM
surveys of 1998-99 and 2007-08.
5.1. Access to and Equity of Education Opportunities
This section provides the average access to and equity of education
opportunities for major indicators including Net Enrolment Rate (NER)
(7) at primary and secondary levels as well as Literacy Rate (LR).
Figure 1 shows Net Enrolment Rate at Primary, (8) Secondary (9) level
and Literacy Rate, (10) for Pakistan for the years 1998-99 and 2007-08.
Figure 1 exhibits an increase in NER and LR for Pakistan over the
time period 1998-99 to 2007-08 at levels of education. However access to
primary level of education for children at their required age is higher
than that of secondary level of education. More than 41 percent of
children aged 5-9 years attended primary level of education in 1998-99
which increased to 55 percent in the year 2007-08. Similarly 24 percent
of children aged 10-14 years were enrolled at secondary (11) level of
education in 1998-99 while the proportion increased to 30 percent in the
year 2007-08. Fifty six percent of the population aged 15-60 years is
literate (12) as compared to 45 percent in 1998-99. Above figure shows
improvement in access to education opportunities, however difference in
access to education opportunities are expected to vary between different
income groups. (13)
To assess the access of different groups of population to education
opportunities we apply above proposed methodology and determine the
inclusiveness of growth in education opportunities at all levels of
income. Figures 2, 3, and 4 represent opportunity curves, (14) over the
time period 1998 to 2008, of access to education opportunities for
different age groups of the population. Growth is argued to be inclusive
if Opportunity Curve shifts upward at all points indicating that
everyone in society is enjoying an increase in overall opportunities
available for the whole society. However the degree of inclusiveness
depends on; how much the curve is shifting upward and in which part of
the income distribution the shift is taking place. It is evident that
when the entire population of children aged 5-9 years (or 10-14 years)
is covered i.e., variable-arranged in ascending order of their
income--in the horizontal axis is 100), the opportunity curve coincides
with the average access to primary (or secondary) level of education.
The upward shift of the curves represent that, overall average level of
education opportunities has increased over the study period
(1998-99-2007-08) and growth is inclusive (Figure 2). However negligibly
slight increase in secondary level opportunities is observed (Figure 3).
Upward slope of these curves shows that distribution of education
opportunities at primary and secondary level of education over the time
period, 1998-2008, is not equitable i.e., children belonging to higher
level of income groups have greater access to education opportunities as
compared to bottom end of the income distribution. Figure 2 clearly
shows that; d[bar.y] > 0 since, average opportunity in primary
education has expanded over the period among children aged 5-9 years.
[FIGURE 2 OMITTED]
Figures 3 and 4 show that average access to secondary level
education opportunities for children aged 10-14 years and literacy rate
is increased (d[bar.y] > 0). However this increase is lower and more
inequitable as compared to the primary level of education. This is also
evident from increasing gap between the two opportunity curves with
increasing level of income. Here shift in curves is greater for children
belonging to households with higher income level. Similar patterns are
observed for literacy rates in Figure 4 for segregated population groups
based on income.
[FIGURE 3 OMITTED]
[FIGURE 4 OMITTED]
5.1.1. Access to Education Opportunities: Opportunity Indices
The opportunity curves depicted above provide only partial ranking
of education opportunities. Opportunity Index ([[bar.y].sup.*]) (OI) and
Equity Index of Opportunity ([phi])(EIO) are also estimated to quantify
the precise magnitude of changes in opportunities and equity level over
time and results are reported in Table 1, The results will help to
evaluate and quantify the changes in access to education opportunities
over the time.
Table 1 shows that EIO for education indicators at all levels
remained below 1 for the time period 1998-2008 confirming inequitable
distribution of education opportunities. It is evident from the results
that the value of EIO for primary level education has improved from 0.83
to 0.86 (i.e., d[phi] > 0). EIO for secondary level of education,
however, remained unchanged. Notably EIO for literacy rate has decreased
(d[phi] < 0) from 0.76 to 0.73 documenting increasing inequalities in
access to education. In order to achieve inclusive growth OI
([[bar.y].sup.*]) should increase, which is possible by increasing; (i)
the level of opportunities [bar.y] (ii) the Equity Index of
Opportunities [phi] or (iii) both (i) and (ii). Since d[[bar.y].sup.*]
> 0, for primary, secondary levels of education and literacy rate is
suggestive that growth is inclusive.
But most importantly, distribution of opportunities is not
equitable at all levels and both pre-requisite of inclusive growth are
met only for primary level of education opportunities whereas in the
case of secondary level education [[bar.y].sup.*] (OI) shows a slight
increase but no change is observed in EIO. Results are even more
unsatisfactory for literacy rate with decline in EIO. These results are
suggestive that over study period (1998-2008) polices were more focused
towards increasing the overall average opportunities at primary level of
education as compared to secondary level of education. Further to
mention equity aspect of the policies could not find much attention and
population from bottom groups remain ignored and still lags behind
resulting in improved average access to education opportunities at
required age but huge disparities prevails across different income
groups. Especially at secondary level of education very small change in
OI can be seen with more inequitable distribution.
5.2. Access to and Equity of Employment Opportunities
This section provides equity and inclusiveness of employment (15)
opportunities over the time period 1998-2008. This analysis, based on
working age population (15+ years), aims to determine the efficacy of
economy to create more job opportunities for population with greater
possibility to be a part of labour force. An employed person could be
categorised as paid or self-employed but a significant proportion of
these employed persons is also engaged as unpaid family worker. This
section also measures the equity of paid employment and monthly income
earned through employment activities over the specified time period.
Figure 5 shows the opportunity curves for employment opportunities
available to the working age population. (16) The curves show that
across all income groups the share of the working age population that is
in employment has decreased over the time. It is also evident that
average employment opportunities are slightly decreased but the
distribution of these opportunities is equitable. This suggests that the
population belonging to the bottom end of income distribution have more
job opportunities than the non-poor.
[FIGURE 5 OMITTED]
Although working age population belonging to bottom end of the
income distribution has more job opportunities but a significant
proportion of total employed persons were engaged as unpaid family
worker therefore analysis is extended to paid employment. (17) The shift
in opportunity curve taken place in Figure 6 shows that the paid
employment opportunities have increased over the time, and distribution
of these opportunities is equitable and inclusive.
[FIGURE 6 OMITTED]
Stagnant but equitable nature of employment opportunities urge the
need to determine the equity of monthly income earned through these
employment opportunities over the time so that nature of employment
could be determined. Figure 7 shows opportunity curves for employment
with average (18) monthly income over the time. It shows the
distribution of employment opportunities with average income earned
across different income groups and suggests that distribution of
employment opportunities with average monthly income has slightly
decreased and remained inequitable over the time. Population belonging
to bottom end of income distribution has lesser share of employment
opportunities in context of average monthly income eamed and is engaged
in low eamings or unpaid employment activities (evident from Figures 5
and 6). For population belonging to higher income groups, on the other
hand, this distribution has slight upward shift over the time.
[FIGURE 7 OMITTED]
5.2.1. Access to Employment Opportunities: Opportunity Indices
Table 2 depicts precise magnitude of equity and changes in
employment opportunities over time period 1998-2008. The results
document a slight decline in overall employment to population ratio
while slight increase is observed in paid employment opportunities.
Decrease in [[bar.y].sup.*] (from 49.13 to 47.49) confirms that
employment growth is not inclusive however it is equitable ([phi] >
1). Increasing value of OI for paid employment in Table 2, along with
decreased OI for employment, indicates that more of the unpaid family
workers are now entered to the category of paid/earning workers and this
shift has taken place at all levels of income distribution ([phi] >
1). In spite equitable distribution of employment opportunities the
equity and inclusiveness of growth in monthly income earned through
these employment opportunities is another important dimension to be
explored, which will also assist to evaluate the nature of jobs being
created in the economy. The results for this exploration are provided in
last two columns of Table 2.
From the findings of study, it is evident that overall employment
opportunities with average monthly income have increased (17.65 to 18.29
percent), but distribution of these opportunities is neither equitable
nor inclusive. Growth is inclusive if d[[bar.y].sup.*] > 0, above
table shows that OI index for employment opportunities with average
income level has decreased to 12.34 in 2007-08 from 12.72 in 1998-99.
Furthermore, working age population belonging to higher income groups of
the society shares larger proportion of job opportunities with monthly
income at or above average level whereas lesser share is left for lower
quintiles. Above findings highlight that population belonging to lower
end of income distribution shares a larger proportion of employment
opportunities but with an inequitable distribution of monthly earnings
from employment opportunities. On the whole efficacy of economy has not
improved to absorb the increasing proportion of working age population
and more of the jobs created are with lower earnings.
6. CONCLUSION
Inclusive growth aims to accelerate economic growth process and
expand socioeconomic opportunities along with ensuring that
opportunities created are available to all segments of society,
particularly to the disadvantaged and marginalised, hence leading to
inequalities decline. This paper assesses the inclusiveness of growth in
terms of education and employment opportunities for Pakistan using data
from 1998-99 and 2007-08 PSLM surveys. Findings presented are based on
two approaches; firstly Opportunity Curves are drawn to provide partial
ranking of opportunities; secondly, Opportunity Index (OI) and Equity
Index of Opportunities (EIO) are calculated to quantify the amount of
changes in opportunities and equity level over time. The results are
suggestive that over the time period 1998-2008 increased education
opportunities are inclusive but distributed inequitably. We find that
overall level of primary education and equity index is improved however
only a slight increase in access to secondary education opportunities is
documented over the study time without any change in equity index. Most
importantly EIO for literacy level is decreased indicating an increase
in inequalities.
Furthermore, it is evident from the findings that proportion of
paid employment activities increased over the time with more
opportunities for lower income groups of the society however these jobs
are below average level of earnings. Population belonging to higher
income groups of the society shares larger proportion of employment
opportunities with eamings at or above average level. Policies must be
devised to; focus on more equitable distribution of primary and
secondary level of education opportunities and also highlight the
urgency to improve the overall access to secondary and higher level of
education which will also improve the access of lower income groups of
the society to decent employment opportunities. In order to actively
engage all groups of the society in growth process policies should be
tailored towards lower income groups of the society with more employment
avenues and higher levels of education so that they could have greater
access to economic opportunities which will ultimately lead to poverty
reduction and hence more sustainable development.
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2010-11. Islamabad: Finance Division.
Rauniyar, G. and R. Kanbur (2009) Inclusive Growth and Inclusive
Development: A Review and Synthesis of Asian Development Bank
Literature. (ADB Working Paper Series).
Stephan, Klasen (2010) Measuring and Monitoring Inclusive Growth:
Multiple Definitions, Open Questions, and Some Constructive Proposals.
(ADB Sustainable Development Working Paper Series).
United Nations Development Programme (2010) Human Development
Report 2010. Yoko, Niimo (2009) Gender Equality and Inclusive Growth in
Developing Asia. (ADB Working Paper Series).
Zhuang, J. (2008) Inclusive Growth toward a Harmonious Society in
the People's Republic of China: Policy Implications. Asian
Development Review 25, 22-3.
Comments
First of all, I would like to congratulate the authors for the
strong conceptual framework of their paper along with an in-depth
literature review. I just have some minor comments: the authors should
give a separate table in an appendix providing details of the variables
used in analysis as well as their construction.
Another point relates to the use of data source for employment
statistics. The authors have used two rounds of PSLM survey data to
calculate employment opportunities. As LFS data is considered better for
employment statistics, since the survey is designed specifically for
gauging the labour market situation in the country, it would be good if
the authors can check for the robustness of their results using the LFS
data.
Lubna Shahnaz
Planning Commission, Islamabad.
(1) World Development Indicators Online World Bank.
(2) Human Development Report (HDR) 2010.
(3) Loss in HDI shows; total loss in achieving potential level of;
human development that could be achieved if there was no inequality in
distribution of: income, years of schooling and expected length of life.
HDR 2010.
(4) Pakistan Economic Survey 2010.
(5) Pakistan Economic Survey 2010-11.
(6) Detailed mathematical derivations of the methodology are
available on demand.
(7) NER (Net Enrolment Rate) refers to the proportion of students
enrolled in a specific level of education with required age of that
level of education.
(8) NER at Primary Level: (Number of children aged 5-9 years
attending primary level (classes 1-5) divided by total number of
children aged 5-9 years) multiplied by 100.
(9) NER Secondary Level: (Number of children aged 10-14 years
attending secondary level (classes 6-10) divided by number of children
aged 10-14 years) multiplied by 100.
(10) Literacy is taken as the ability to read and write with
understanding and Literacy Rate is the population that is literate,
expressed as a percentage of the total population (Presented literacy
rate is for 15-60 years aged population).
(11) NER at middle level (aged 10-12) is 18 percent and at Matric
Level (aged 13-14) is 11 percent (Government of Pakistan).
(12) A person is literate if he/she can read and write with
understanding.
(13) Ali and Son (2007).
(14) Horizontal axis of opportunity curves represent the population
arranged in ascending order of per capita yearly income level of their
household.
Notes:
1. Per capita Income level is determined by dividing the total
yearly income of household with total number of person of that
household.
2. Total yearly income variable is based on multiple P1HS
indicators that provide information on total income received from all
members of the household from; employment activities, pensions,
remittances, selling goods/property, revenues generated from rent or
profit or any other source.
(15) Any person who worked for at least one hour for pay, profit or
family gain during the month preceding the survey is considered as
employed.
(16) population aged 15 years and above is considered as working
age population (results are still valid if population aged 15 years and
above currently attending school is excluded from base population).
(17) All employment activities (self-employment, paid employee)
which resulted in earnings received in cash or in kind i.e. unpaid
family worker are not included in this category.
(18) Median of monthly incomes earned through employment activities
by all employed persons is considered as average monthly income of the
population. For 1998-99 average monthly income was Rs 2500 and for
2007-08 it was above Rs 4500.
Saima Asghar <saimaas_4@hotmail.com> is affiliated with the
Department of Government and Public Policy, National Defense University,
Islamabad. Sajid Amin Javed <sajidamin78@gmail.com> is Assistant
Professor, Pakistan Institute of Development Economics, Islamabad.
Authors' Note: Author is highly grateful for Dr Muhammad Aslam
Khan (Director SHRDC) and Dr Usman Mustufa, Chief Project Evaluation and
Training Division, PIDE for their initial input on the conceptual work
of this study.
Table 1
Opportunity Index for Access to Education Opportunities 1998-2008
Population Share Primary
(Percent)
1998-99 2007-08
10 23.54 35.38
20 26.98 40.24
30 29.92 42.77
40 32.38 45.24
50 34.20 47.25
60 35.68 49.72
70 37.16 51.34
80 38.15 52.88
90 39.79 54.33
100 40.93 55.31
Opportunity Index ([[bar.[gamma]].sup.*]y) 33.87 47.45
Equity Index of Opportunity ([phi]) 0.83 0.86
Comments Not Not
Equitable Equitable
Population Share Secondary
(Percent)
1998-99 2007-08
10 9.27 9.92
20 11.84 14.09
30 13.45 16.85
40 15.04 18.85
50 16.52 20.57
60 18.17 23.08
70 19.61 25.17
80 20.87 26.77
90 22.65 28.47
100 24.08 30.01
Opportunity Index ([[bar.[gamma]].sup.*]y) 17.15 21.38
Equity Index of Opportunity ([phi]) 0.71 0.71
Comments Not Not
Equitable Equitable
Population Share Literacy
(Percent)
1998-99 2007-08
10 22.62 23.53
20 25.13 29.05
30 28.09 32.85
40 30.88 36.85
50 32.88 39.83
60 35.09 43.55
70 37.45 46.68
80 39.61 49.81
90 42.21 53.28
100 44.84 56.13
Opportunity Index ([[bar.[gamma]].sup.*]y) 33.88 41.16
Equity Index of Opportunity ([phi]) 0.76 0.73
Comments Not Not
Equitable Equitable
Source: Authors' own calculations based on 1998-99 and 2007-08 PSLM
Survey.
Table 2
Opportunity Index for Access to Employment Opportunities 1998-2008
Employment
Population Share
(Percent) 1998-99 2007-08
10 56.35 56.20
20 55.65 54.48
30 54.28 53.28
40 52.93 52.29
50 52.27 51.19
60 51.24 50.23
70 50.57 49.47
80 50.13 48.66
90 49.61 48.01
100 49.13 47.49
Opportunity Index ([[bar.[gamma]].sup.*]y) 52.22 51.13
Equity Index of Opportunity ([phi]) 1.06 1.08
Comments Equitable Equitable
Paid Employment
Population Share
(Percent) 1998-99 2007-08
10 37.28 38.47
20 38.39 38.76
30 38.07 38.98
40 38.02 39.02
50 38.08 38.82
60 37.79 38.58
70 37.63 38.46
80 37.63 38.22
90 37.52 38.07
100 37.53 37.93
Opportunity Index ([[bar.[gamma]].sup.*]y) 37.79 38.53
Equity Index of Opportunity ([phi]) 1.01 1.02
Comments Equitable Equitable
Employment with
Average Monthly
Income
Population Share
(Percent) 1998-99 2007-08
10 6.34 5.27
20 8.66 7.89
30 10.19 9.54
40 11.52 10.65
50 12.48 11.83
60 13.68 13.13
70 14.67 14.29
80 15.46 15.52
90 16.58 16.98
100 17.65 18.29
Opportunity Index ([[bar.[gamma]].sup.*]y) 12.72 12.34
Equity Index of Opportunity ([phi]) 0.72 0.67
Comments Not Not
Equitable Equitable
Source: Authors' own calculations based on 1998-99 and 2007-08 PSLM
Survey.
Fig. 1. Major Education Indictors
1998-99 2007-08
NER Primary 41% 55%
NER Secondary 24% 30%
Literacy Rate 45% 56%
Source: Authors' own calculations based on 1998-99
and 2007-08 PSLM survey.
Note: Table made from bar graph.
