The Impact of Income Inequality and Intergenerational Mobility on Human Development: An empirical evidence from Pakistan

Abstract

Human development of a society can be affected by different structural, socioeconomic and public policy variables. Income inequality is one of such variables.  In literature, it has been identified as an important detrimental factor for human development. However, equal opportunities of upward intergenerational mobility for different segments of the society can mitigate the negative effects of income inequality.  This study aims to investigate the role of income inequality and the opportunities of intergenerational mobility for the process of human development.  By using the data of different districts in four provinces of Pakistan, we have found that income inequality and educational inequality have retarding effects on human development. Public provision of social services, decentralization, intergenerational income mobility and intergenerational educational mobility have been found to be positively and significantly associated with human development.  It implies that the opportunities of upward socioeconomic mobility can help to mitigate the negative effects of inequality on human development.