Poor dad, poor son

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Raza Khan is a driver working for a relatively affluent family in Lahore. His family lives in a village in Southern Punjab. He is the son of a landless tenant. He did not get any education, worked till his 20s in the fields to help his parents, and then went to Karachi to find work when work became scarce in the village, learnt driving and made that his profession. His fathers family lived below the poverty line. With four children he is also living below the poverty line, and his children are going to the village government school because he wants them to get educated. Given his income and lack of ability to afford private schools or college education for his children, it is very likely his children will end up being poor as well. And it might hold for the fourth generation too.

Sometimes we do come across families who have been able to move up the economic ladder over a generation or two. But most of these stories happen in urban areas, the move is usually from low or middleclass and to a step higher or a few steps higher, and/or it usually involves migration. In fact in some parts of the Punjab and Kyber Pakhtunkhwa the major movements up the social scale happened due to the migration to the Gulf and the resulting income streams. Interior Sindh, Southern Punjab and most of Balochistan did not benefit much from the opportunity.

But data, from even fairly fertile areas of Punjab, shows that there are substantial proportions of the population, especially at the bottom of the economic and social ladder, such as Raza, who are unable to escape poverty even across generations. Intriguingly, there is little research on such excluded populations or on the pathways of persistence that restrict their movement. Why is it that even where educational institutions are present, we find persistence of illiteracy (and a lack of access to skills) across two or three generations?

Redistribution done through progressive taxation and through access to services such as education, health, and social protection benefits is supposed to help the poor break the cycle of poverty across generations if not in one life time. But clearly, these do not function well in Pakistan.

In addition, there seems to be significant fragmentation and segmentation in a number of markets that might have been helpful also. Land markets are almost closed even today to the castes that were classified as landless classes by the British. Even the artisanal classes do not find it easy to access land even when they have been able to break the cycle of poverty through income flows from migration. Land markets are locked due to, among other reasons, a) archaic land record systems, b) large chunks of land being non-settled and non-transferred across generations, c) fragmentation of land holding, d) issues of family holdings, and e) government holding land that it could bring into the market to open up land markets. There are also social barriers against certain castes owning and/or holding land.

A similar dynamic seems to be working in the education market. Ali Cheema and Farooq Naseer, in their recent work on Sargodha, show significant persistence in illiteracy across three generations, even where schools are present in villages and are accessible. The exclusion is the worst for the lowest classes.

It is not easy to answer why. A part of the story must surely have to do with fragmentation of the labour market. The poorest and the most marginalised must feel that education is not worth having, or that educational quality offered to them is not worth having and returns to education do not justify spending time in school. It could be that even if they get educated, the lowest classes cannot access jobs or occupations open to others. Some sort of fragmentation based on caste must be at work, but it is not clear, from the work that I have seen, as to why that might be or how it works.

A significant proportion of the marginalised do not think that getting literate has worthwhile returns. But, surely, from a social justice perspective, this is unacceptable. If one of the purposes of society is to offer some hope to all and ensure effort to move in the direction of equality of opportunity, such pockets of persistence of extreme exclusion are worrying. Clearly the state mandated or societal systems for redistribution are not working.

But this does not come as a surprise. Our tax system is dependent on regressive indirect taxes, while many of the direct taxes have been removed and the remaining have been flattened. Since only a small proportion of the countrys rich pay taxes the lack of resources and progressivity is not surprising.?

On the expenditure side, given the large proportion of the budget going for defence and debt servicing, and the lack of priority for redistribution and for claims of social justice, the state systems do not work.

The poor and the excluded might be restricted by lack of opportunities, clearly the richer classes in Pakistan are not. And as they have moved forward, inequality has increased in Pakistan. And that does not bode well for our future. Some serious work on inequality, exclusion and marginalisation is well warranted.

The writer is an Associate Professor of Economics at LUMS (currently on leave) and a Senior Advisor at Open Society Foundation (OSF). He can be reached at [email protected]