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Forces of divergence in Pakistan
By: Dr. Sajid Amin Javed

Thomas Picketty, the French economist known for his work on wealth and income inequalities, has challenged the old economic verities about an inverted U-shaped relation between economic growth and inequality. Discussing increasing primordial tendencies in global capitalism, he identifies the inheritance being the key factor behind skewed distribution of wealth. Huge reception of his work voices the urgency and need to curb this enlarging gulf of inequality globally. The political movements in Europe and America also pushed this debate into public space and popular consciousness across the world over. The butterfly effects of it could also be felt in Pakistan but contained mostly to elite discussion forums.

Pakistan is a country with an array of social inequalities ranging from health to education inequalities and from skill to income and wealth inequalities prevailing across inter and intra gender and regions. The suppression of the deprived is not only persistent but is widening over the time. The distribution of income across the population became skewed more towards the rich and, over the period (1987-2010), income share of bottom 20% declined from 8.8 to 7 and that of top 20% increased from 43.5% to 48.7% worsening the ratio of the highest to lowest quintile. The top 20% clasped income 7 times higher in 2012 as compared to 5 times than their counterparts in bottom 20% in 1980.
Similarly, the share of top decile (10%) in total consumption increased from 30.3% in 1990 to 31.3% in 2011-12 while that of middle 50% (the middle-class) declined 49.2% to 48.5% over the same period resulting in Palma index increasing from 1.48 to 1.55 in 2011-12.
Accordingly, the per capita income Gini coefficient witnessed an increase from 0.350 in 1987-88 to 0.407 in 2010-11 indicating the unequitable distribution of the growth benefits and the widening disparities. The disparities are higher in rural areas as compared to the urban ones. These statistics have stronger implications suggesting a failure to curb the rich-poor gap in last three decades.
The labour market in the country does not paint a different picture. The increase in the wages of elementary occupation is not at parity to the increase in noble occupations, including professional and managerial jobs. To be exact, over the last 3 decades, the real wage of elementary occupations actually decreased as ratio to the wages paid to managerial and professional jobs. These differences in wage values across the gender and occupations, increasing over the time, help explain the coincidence of upgradation of skills and one hand and rising inequality amongst skilled and unskilled workers on the other in the country. The same is true for the formal and informal markets divide.
These diverging inequalities, along with other factors, emerge primarily from disparities in the access to quality education. Inequalities in education leave a long lasting impact on all types of social inequalities. Born poor are more likely to stay poor because the poor parents are unable to buy them a good education which, in turn, chokes off the other opportunities available limiting the poor to elementary occupation in the labour market leaving them destined to lower levels of income again.
This transmission of poverty through intergenerational educational immobility goes generation to generation and the persistence can be severe in magnitude and hard to get rid of if the opportunities of education are not equitably distributed. Failure (success) in educations defines how one lives the adult life in terms of social participation, child welfare and social security systems, etc. Breaking the socioeconomic status-success (failure) inter-linkages, education serves as the leveler only if access to educational opportunities is equitable.
Since the times of Dr Mehbub, the idea of functional inequality is in vogue in policy epicenters of Pakistan. Redistribution has never remained popular nor are any somber policy attempts made for serious overhauling of the entrenched structures of inequality causing divergence in opportunities available to ones looking for deliverance. Markets are presented as protagonist which, through in built mechanisms of distribution, reduce inequality. However, recent studies submit contrasting evidence at household level that is structural and inter-generational. Provision of equal opportunities has been considered as one of the key objectives of economic policy as it enhances opportunities of social mobility for all income groups. Equality of access to opportunities of quality education, based on the “ability of anyone” ensures, for the marginalized and deprived, riding the economic ladder up. Excluded from the quality education, one is left unable to take advantage of the opportunities available in the labour market. Provision of quality education, across the globe, has emerged, therefore, to be the single most effective tool to combat “chronic poverty”.
Unfortunately, findings of a household survey present a bleak picture of structural inequality for Pakistan that extends to generations. Shift in consumption patterns, profusion in number of cell phone users or increase in sales of durable items do not eliminate inherited legacies of inequality. Educational attainment of child, and resulting occupational choice and, consequently, the social status is almost completely determined by socio-economic status of Father. Disparities are evident at all levels of education. One of the striking indications from the data is that only 9% of the sons whose father never attend a school are likely to get graduate and above degree while the rate is 60% for the sons whose fathers have graduation or higher level of education. Furthermore, 50% of the sons never attend school if their fathers were illiterate. At the same time fathers with graduation or higher level of education correspondently influence the education attainment of their sons. Almost 60% of their sons would attain higher education and directly capture the blue-collar jobs in labour market.
The picture becomes even gloomier when comparison is made between rural and urban populations. The family background impact is even stronger in the rural areas as the probability is 74% that a son will end up with graduation or higher degree given that the father is at least holds graduation. This probability is 46% in urban areas. Hold the hands of father up in the ranking, and you ride high.
The rural peripheries are afflicted by a deep malaise of economic stagnation in agriculture, poor quality of public education system and bad conditions of physical infrastructure. Dipankar Gupta has carved a snapshot of Indian village infested with deep cultural and spiritual discontent which is directly dependent on the diminishing position of village as a production unit that is equally applicable to any Pakistani village. Recent crop failures and low rates for agriculture produce are actually reifying the probability that this generation of middle to small farmers will be left behind in the soaring competition for sustainable livelihood.
Alarmingly however, a regression in the equitable distribution of the opportunities in education is documented for Pakistan. A son born before 1980 has 13% chances of earning a graduation degree or above even if he was born to a father who never attended school, but the likelihood declined to 7% for the one born after 1980. The opportunities of education, though increased over the last decades but distribution thereof turned more skewed toward higher quintiles of population at all levels of education. The indicators of distribution of the opportunities available in the education market indicate a looming large impact of family background on the education of child and the size of the impact increases over the time.
A society wherein opportunities are equitably distributed in education, the children can rise up to the noble occupations including managerial and professional jobs irrespective of the occupation their fathers were in. In Pakistan, however, the chances of riding to the highest ladder of managerial and professional jobs are only 1.5% for the son born to a father working in elementary professions. Also, a very high ratio of sons, having the fathers working in high ranked occupations, is falling to lower ranked occupations suggesting an alarming situation of regression in occupational status where the sons’ generation is falling behind their fathers.
Human capital theorist and proponents of human development paradigm has attributed great importance to education for climbing up the ladder of social mobility. But leaving education to markets has further expanded the gulf in educational attainment among different classes. The market has an inherent tendency of segmenting the targeted markets; same has happened with education market in Pakistan. From Montessori to higher education one can note mushrooming chains of schools/colleges and universities in private sectors. Each offer different quality at different rates, the choice is left with customer’s pocket. Wealth begets quality education. The households falling in higher income quintiles have the luxury to send their children for education in elite private sector based institutions, which enjoys good reputation in market but are inaccessible to lower income quintiles.
Degree from a quality university will increase the probability to capture better employment positions available in market. Private market of education with a swish of a wand pushes a majority out of the competition. Thus competition for blue-collar jobs remained a prerogative of scions from higher income groups. While working class father could not buy a good education so his son either have to find work in the same profession, or if get lucky, then could migrate to gulf for joining similar elementary jobs. Glaring inequalities in educational attainment reduce scope for poor groups to climb up the ladder of social status and discourse of meritocracy sounds very naïve to their poor ears.
The leveling attributes associated with education seem not working and have little impact in Pakistan. Quality education keeps remaining a privilege for those who can buy it. Continuous distancing of state from social policy has happened at the detriment of already poor and marginalized sections. The invisible hand of market is visibly pushing the socio-economic stratification to new levels.
The fallouts of these trends are already becoming evident. The demographic dividends which could pull the economy out of stagnation is, ironically, becoming a social burden in Pakistan. Good education out-classes the bad education and higher socioeconomic status stands the key to good quality education in the absence of state ensuring a quality education for all. At the same time, the wage earning profile for poor is lower compared to people from higher socioeconomic position even if the education level are constant for both.
The policy makers must understand that the entrance to basic level of education system, the primary level education, has a long lasting impact as it is the first point of breaking the family background-educational outcome nexus. Exclusion of the deprived from the quality education at this very first level, results in a large looming parental background impact on the eventual outcomes of the child. The trend of poor parents sending children to poor schools (public schools in our country) and the rich parents buying a good quality education from private school systems needs to be curbed by the state. The divide is extraordinarily sharp at primary level of education.
The equality in educational quality in terms of the teaching quality, study environment, medium of education and syllabus should be ensured at all levels but particularly at primary level because the skills learned here sets the base for the quality of skills to be acquired at higher levels of education. For this Herculean task to be achieved, the doctrine of minimal state intervention has to be put on halt. Quality education is costly and if left only in the hands of private sector the class and status distinction will remain intact and keep perpetuating the inequalities in wealth and income. These structural forces of divergence need to be curtailed and tamed.
Let me assert here that the point is not about abandoning the private sector to provide good quality education; rather it is the public sector that must come with increased quality of education. The rich can’t be held responsible for their affordability to buy good education. Rather poor needs to be backed up with the affordability by the state. The “family background” free entry into education and exit to the labour market must be ensured in order to provide equitable access to all segments of society irrespective of their socioeconomic status. The returns on education are more a function of quality than the years completed. The education system of Pakistan seems reinforcing the differences in family background.
Educational policy, based on fairness and inclusion, ensuring equitable access to quality education, is not only associated with more equitable growth but also ensures a social transformation towards less unequal society. A careful examination is also needed on “out of school” going children as the bulk of these come from the poor parents and this dynasty can fall in “under education trap” strengthening the poverty trap further if not checked.
Education needs to be framed and treated as a lever equalizing the society. A continuous operation of one superior elite education system, sensitive to parental socioeconomic position, can produce social strata polarized highly. To compensate the family background, the state has a greater role to play; the one beyond the debates on budgetary allocations of 4% as the money, though necessary, but not suffice to guarantee the equitable access to quality education. The call is for educational reforms.
Source: http://www.brecorder.com/articles-a-letters/187:articles/1228902:forces-of-divergence-in-pakistan/?date=2015-09-20

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The opinions expressed in this article are the author's own and do not necessarily reflect the viewpoint or stance of SDPI.