Personal Earnings in Pakistan: Role of Information Communication Technology (ICT) and Livelihood Diversification

Abstract

The determination of factors explaining personal earnings has remained a matter of great interest among economists. This study explores important socioeconomic and demographic factors affecting personal earnings in Pakistan with a special focus on the contribution of ICT usage and livelihood diversification. Ordinary Least Squares (OLS) regression models have been estimated using the most recent available PSLM (2019-20) data published by the Pakistan Bureau of Statistics (PBS). After careful screening, the data has been restricted to only those individuals who earn either through farm, non-farm, or diversified livelihoods. The results suggest that the use of ICTs has a significant contribution to the earnings in Pakistan. Similarly, livelihood diversification i.e., participating in both farm and non-farm employment activities can greatly improve personal earnings. The non-farm sector also remarkably supports the agriculture-based Pakistan’s economy. Especially, the small landholders have to inevitably search for additional livelihood sources as risk coping strategy. Education is found one of the most important determinants of personal earnings. It is suggested that measures should be taken to improve access to ICTs and internet facilities at the national level with a special focus on the most backward areas. Moreover, the government may acknowledge and support the livelihood diversification strategies as a component of the national objective for job creation. Stringent efforts are recommended to ensure the provision of free and quality education for all with equal opportunities.