This paper quantifies the contributionsto distributional changes observed in Pakistan over the lastdecade. In contrast to methods that focus on aggregatesummary statistics, the method adopted in this papergenerates entire counterfactual distributions to account forthe contributions of demographics, labor and non-laborincomes in explaining poverty reduction. The results showthat the most important contributor was the growth inincome. Moreover, this growth in income seems to be drivenby returns to individual and household endowments, pointingto productivity increases as the driving force behindpoverty reduction. Lower dependency ratios, transfers andremittances also contributed to poverty reduction, albeit toa smaller extent. Growth in productivity, particularlybetween 2001-02 and 2005-06 is consistent with estimatesfrom aggregate accounts, which points to productivity growthled by movements of labor force away from agriculture andinto industry and services. If the objective is to reachsimilar or accelerated poverty reduction and productivitygrowth going forward, increased investment in rural areaswill be needed.
PDF
download
878987797
028-85220240
