This thesis investigates the role of education, employment and household structure in explaining poverty and inequality in Zambia between 1991 and 2004. This period was characterized by macroeconomic and structural adjustment reforms that led to declining public sector employment due to liquidations and retrenchments and changed education distribution due to, among many other reasons, the introduction of user fees. Trends in poverty and inequality are profiled. It is found that poverty increased while inequality reduced. The thesis explores some key drivers of these changes. Using a semi-parametric kernel density re-weighting approach, it is found that changes in education endowments and economic returns to education, employment and household attributes explain a substantial part of changes in the distribution of consumption and therefore inequality.