Even though the area of the study is rural, nonfarm income is the single most important source of income. Because it includes income from unskilled labor, which is vital to the poor, nonfarm income is an inequality-decreasing income source. Households in the lowest income quintile receive almost 50 percent of their total income from nonfarm sources and only 10 percent from agriculture. However, not all types of nonfarm income have such a favorable effect on equity. Income from government employment tends to go to richer households because government jobs often require more education than poorer households can afford.
Agricultural income is the second most important source of income.
Unlike nonfarm income, however, agricultural income is an inequality-increasing source of income. Agricultural income depends largely on access to land, and land is unevenly distributed in rural Pakistan. The report also finds that the type of crop grown affects inequality. Since sugarcane increases income inequality more than any other crop, the report concludes that government pricing policies that currently subsidize sugar production need to be revised. The report finds that livestock income reduces inequality.