Orthodox Islamic institutions and individual income: evidence from Pakistan

Religiosity and income have a multifaceted, complex relationship. Theories have different courses by which religion defines income, positively or negatively. However, religion and income can be influenced by many factors and vary between cultures and religious factions. This study aims to contribute to developing that understanding by focusing on Pakistan, a predominantly Muslim country. In this regard, we examine the impact of affiliation with orthodox Islamic institutions on an individual's income. This study utilizes data from the Pakistan Social and Living Standard Survey (PSLM) conducted by the Pakistan Bureau of Statistics, spanning three time cohorts (2010–2011, 2014–2015, and 2019–2020) with sample sizes of 76,546, 78,635, and 195,000 households, respectively. We find that individual income varies significantly positively based on religiosity. Similarly, minority and minority interaction with religiosity significantly positively impact lone income in the studied context. These findings emphasize the need for nuanced understanding and consideration of cultural and religious factors when exploring the dynamics between religiosity and economic outcomes.