Determinants of Intra-Household Income Inequality: A Case Study from Rural Pakistan

Abstract

Inequality has emerged at macro level but by finding the solutions of the problem our debate comes to the micro level. By exploring the root causes of income inequality at micro level we cannot ignore the role of a household head for effective planning for their children. The purpose of this study is to estimate the income inequality of households and to find the impact of the most relevant factors on the income inequality at a household level. The data about 400 household including 2266 individuals is extracted from the Household Integrated Economic Survey (HIES) which is conducted in 2015-16 under special survey namely Household Integrated Income and Consumption Survey. This approach to family welfare analysis is a new dimension may become controversial as the hypothesized explanatory variables mostly belongs to household head who has decision making powers, as the determinants of intra-household inequality. The significance of most of the variables shows some reality that household head in some way become the reason of intra-household inequality. Though some results are not according to expectations such as negative relationship of intra-household inequality and household size but this is trending result as a positive sign towards more sharing and cooperation within a family. The positive relationship between number of females and within family inequality is a call for sound policies to reduce gender gap and get women into mainstream economy. The fall in occupations such as farming and livestock sector and other elementary occupations are also becoming the reason of intra-household inequality which needs policy maker’s attention.