Introduction:Education upgrades the capacity,ability and widens the psychological skylines of the human judgment and cause.Education is a standout amongst the most crucial elements of human capital.
Itis a multidimensional process and it additionally assumes the crucial part inthe upgrade of the financial development of a nation. Every single developed nationis produced because of putting resources into education. Income inequality and povertyis also decreased with the help of education as there are solid linkagesbetween them. The poor areas of developed societies have caught bigger offer ofthe benefits of their economic development and advancement because there isgreat fairness in the distribution of educational opportunities in developedcountries. The purpose of this study is to investigate different mainelements for deciding the impacts of education, physical capital and poverty oneconomic growth and development in Pakistan. This paper is a qualitativeresearch paper and the investigation depends on the interpretivephenomenological approach which investigates the different features on theincome inequality and education in developing countries, particularly inPakistan.
This study also clarifies that how we can decrease the pay imbalancein Pakistan. The extent of this paper is that it will put a further light onthe issues Pakistan is confronting or had confronted and help individuals toadjust it. The following is the research question of this paper: · What is the relationship between education andincome inequality in Pakistan and what are the ways to reduce income inequalityin Pakistan?Literature review:There are many elements affected byinequality in distribution since the starting of the time and it is alsoobserved by many people (Ahmad, 2013).
Even from human’s move to the planet itis investigated by many researchers that there are many different components ofdevelopment that are affected by economic inequality. Education is one of themain components of development. And it is also one of those components which areaffected by income inequality. It is important for a country to spend on its educationto succeed in every field, because education provides many benefits for people.It increases the efficiency and productivity of people. The general publicobtained exceptional victory in every field when the government spent great sumfor the educational advancement (Carstensen, 2013). Nations with high wageimbalance have low literacy rate and in addition insignificant educated workforce (Nolan et al., 2014).
Pakistan is a nation which is facing no properdistribution of wealth and extreme income inequality. Large part of thepopulation of Pakistan is associated with the agriculture industry, but themain problem is that the industry is controlled by the elite landlords havingboth political and financial power. These elites rarely pay the poor workforceof the country. This is the main reason of income inequality in large part ofthe population. Due to scarce resources the poor people are unable to sendtheir children to school. Another reason causing income inequality in Pakistanis that a large amount of share of the agriculture sector is transferred toother sectors, many people are losing their jobs and this is also increasingincome inequality in the region (Zhuang, Kanbur, & Maligalig, 2014).Transfer of agriculture sector’s share to the other sectors is preventing thepoor people from using sufficient education opportunities as they are pushed tothe lowest level of poverty. Another major reason of income inequality is thatthe elites of Pakistan are paying fewer taxes for their high income level andthe poor people are paying high level of taxes for their low income level.
Thisregressive taxation system of the country is once again not letting the poorpeople to avail education opportunities. Thefact of economic growth explained by Mohammed Farooq (2010) which is observedat a higher level that in many nations there is a low rate of wage imbalanceand appropriate distribution of basic necessities because in such countrieseducation is a basic necessity and being in approach of each single resident.Education is a vital element of human capital which continuously upgrades thecapacity and widens the critical thinking of human mind. Therefore in countrieswhere there is more prominent value in distribution of education, the poorpeople of these societies have availed and appreciated the share of thebenefits of national economic growth.Theoretical framework: Many researchersexplained the inverse relationship between income inequality and education. Psacharopoulos,etal., Park and De Gregorio (1995) has demonstrated an inverse relationshipbetween a country’s normal education level and wage disparity.
It isunderstandable that a population’s average education level grows the strengthit causes to decrease income inequality. Some researchers inspected the numberof enrolments in education based on income inequality. A study by Alderson andNielson (2002) and a study by Barro (2000) explained that number of enrollmentsparticularly at the secondary level with diminished in pay imbalance. Butaccording to Barro (2000) there is a reverse connection between primaryeducation enrollments and income inequality as well as direct relationshipbetween higher education enrollments and Income inequality.
Geographical Inequality in PakistanAzfar (1973), Bergan (1967) and Khilji (2007) are theresearchers who calculated the Gini-coefficients for the rural and urban areasbased on the education division. According to Bergan income inequalities inPakistan were very were little as contrasted with different developing nations.In case of education inequalities in rural areas were lower than urban areas.The value computed for Gini-coefficient for urban zones was 0.
430, rural areas0.357 then again estimation of the Gini-coefficient for Pakistan was computedas 0.381. The Gini-coefficients calculated by Azfar (1973) decreased to 0.424 forurban areas and 0.
334 for rural areas. On the other hand Gini-coefficient forboth the rural and urban zones together declined from 0.381 to 0.
365. Malik (1996)explained that parents living in rural regions of Pakistan are uneducated andnot very much aware of education and its significance. Literacy rates in ruralareas of Pakistan are lower in contrast to urban areas.
There is a positiverelationship between household’s education accomplishment and its income. Human Capital and Income InequalityEducation is a key component of human capital. Countriescannot develop and attain growth without education. Education is the first stepin development and growth process according to Raja (2000).
It gives twofavorable circumstances; firstly it expands the economic development of acountry, secondly it decreases poverty and helps in growing productivity. Forthe spreading and adoption of new technologies it is vital to have awell-educated labor force. In Pakistan there is shortage of physical and humancapital. Quantity as well as nature of education at each level requests forabilities to accomplish a decent economic growth rate explained by (Adawo, 2011).Agriculture Sector and Income InequalityAgriculture sector utilized more than 45% of its aggregatepopulation in Pakistan.
85% are small farmers out of the percentage. The sampleof 300 small farmers of central Punjab was used by (Sabir, Hussain & Saboor,2006) to explore the status of poverty among them. These researchers found thateducation is the main factor that could decrease poverty and , old age of thehead of family unit, substantial size of family unit, little yield and lowcost, dependency ratio and insufficiency of infrastructure are the couple ofdeterminants of high poverty in central Punjab, Pakistan.Gender InequalityGender inequality is stopping access to educationfacilities, improves poverty level and creates leaps in the financial developmentof a country.
Chaudhry and Rehman (2009) have evaluated with the help of Logitregression model that in Pakistan the size of family unit and female to maleproportion has notable and also positively effect on poverty. On the other sidefemale to male enrollment proportion in educational institutions, education ofhead of family, literacy proportion of female to male and proportion of workersof female to male have been altogether negatively influenced the rural poverty.