The Impact of Foreign Aid, Energy Production and Human Capital on Income Inequality: A Case Study of Pakistan

Abstract

This study attempt to examine the impact of foreign aid, energy production and human capital on income inequality in case of Pakistan. For empirical analyses, the study have been used annual time series data covering the period 1984 to 2012. The study has been used the Johansen co-integration to see the long run co- integration among the variables of the study. The results of Johansen co-integration shows that there is long run co-integration among the variables of the study. The long run coefficient shows that foreign aid and human capital play significant role to decrease the income inequality in case of Pakistan. When energy production positively and significantly affect income inequality in case of Pakistan.