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Unemployment
Unemployment
The inability of a willing person to find work can be defined as Unemployment. Any
skilled person who is looking for a job with all the necessary qualifications is unable
to secure some work for himself is said to be unemployed. In other words, It is the
condition where people of the working-age are incapable of finding an occupation
for themselves.
Unemployment is measured by the unemployment rate, which is the number of
people who are unemployed as a percentage of the labour force (the total number
of people employed added to those unemployed).
The state of being without any work yet looking for work is called unemployment.
Economists distinguish between various overlapping types of and theories of
unemployment, including cyclical or Keynesian unemployment, frictional
unemployment, structural unemployment and classical unemployment definition.
Some additional types of unemployment that are occasionally mentioned are
seasonal unemployment, hardcore unemployment, and hidden unemployment.
"voluntary" and "involuntary unemployment
Though there have been several definitions of "voluntary" and "involuntary
unemployment" in the economics literature, a simple distinction is often applied.
Voluntary unemployment is attributed to the individual's decisions, but involuntary
unemployment exists because of the socio-economic environment (including the
market structure, government intervention, and the level of aggregate demand) in
which individuals operate. In these terms, much or most of frictional
unemployment is voluntary since it reflects individual search behavior. Voluntary
unemployment includes workers who reject low-wage jobs, but involuntary
unemployment includes workers fired because of an economic crisis, industrial
decline, company bankruptcy, or organizational restructuring.
On the other hand, cyclical unemployment, structural unemployment, and classical
unemployment are largely involuntary in nature. However, the existence of
structural unemployment may reflect choices made by the unemployed in the past,
and classical (natural) unemployment may result from the legislative and economic
choices made by labour unions or political parties.
The clearest cases of involuntary unemployment are those with fewer job vacancies
than unemployed workers even when wages are allowed to adjust and so even if
all vacancies were to be filled, some unemployed workers would still remain. That
happens with cyclical unemployment, as macroeconomic forces cause
microeconomic unemployment, which can boomerang back and exacerbate those
macroeconomic forces.
Real wage unemployment
Classical, natural, or real-wage unemployment, occurs when real wages for a job
are set above the market-clearing level, causing the number of job-seekers to
exceed the number of vacancies. On the other hand, most economists argue that
as wages fall below a livable wage, many choose to drop out of the labour market
and no longer seek employment. That is especially true in countries in which low-
income families are supported through public welfare systems. In such cases,
wages would have to be high enough to motivate people to choose employment
over what they receive through public welfare. Wages below a livable wage are
likely to result in lower labor market participation in the above-stated scenario. In
addition, consumption of goods and services is the primary driver of
increased demand for labor. Higher wages lead to workers having more income
available to consume goods and services. Therefore, higher wages increase general
consumption and as a result demand for labor increases and unemployment
decreases.
Many economists[who?] have argued that unemployment increases with increased
governmental regulation. For example, minimum wage laws raise the cost of some
low-skill laborers above market equilibrium, resulting in increased unemployment
as people who wish to work at the going rate cannot (as the new and higher
enforced wage is now greater than the value of their labour).[7][8] Laws restricting
layoffs may make businesses less likely to hire in the first place, as hiring becomes
more risky.[8]
However, that argument overly simplifies the relationship between wage rates and
unemployment by ignoring numerous factors that contribute to
unemployment.[9][10][11][12][13] Some, such as Murray Rothbard, suggest that even
social taboos can prevent wages from falling to the market-clearing level.[14]
In Out of Work: Unemployment and Government in the Twentieth-Century America,
economists Richard Vedder and Lowell Gallaway argue that the empirical record of
wages rates, productivity, and unemployment in America validates classical
unemployment theory. Their data shows a strong correlation between adjusted
real wage and unemployment in the United States from 1900 to 1990. However,
they maintain that their data does not take into account exogenous events.[15]
Cyclical unemployment[edit]
US unemployment rate, 1990—2022. The increase in unemployment during
recessions (shaded) is called cyclical unemployment.
Cyclical, deficient-demand, or Keynesian unemployment occurs when there is not
enough aggregate demand in the economy to provide jobs for everyone who
wants to work. Demand for most goods and services falls, less production is
needed and consequently, fewer workers are needed, wages are sticky and do not
fall to meet the equilibrium level, and unemployment results.[16] Its name is derived
from the frequent ups and downs in the business cycle, but unemployment can also
be persistent, such as during the Great Depression.
With cyclical unemployment, the number of unemployed workers exceeds the
number of job vacancies and so even if all open jobs were filled, some workers
would still remain unemployed. Some associate cyclical unemployment with
frictional unemployment because the factors that cause the friction are partially
caused by cyclical variables. For example, a surprise decrease in the money supply
may suddenly inhibit aggregate demand and thus inhibit labor demand.
Keynesian economists, on the other hand, see the lack of supply of jobs as
potentially resolvable by government intervention. One suggested intervention
involves deficit spending to boost employment and goods demand. Another
intervention involves an expansionary monetary policy to increase the supply of
money, which should reduce interest rates, which, in turn, should lead to an
increase in non-governmental spending.[17]
Unemployment under "full employment"
Short-run Phillips curve before and after Expansionary Policy, with Long-Run
Phillips Curve (NAIRU). Note, however, that the unemployment rate is an
inaccurate predictor of inflation in the long term.[18][19]
In demands based theory, it is possible to abolish cyclical unemployment by
increasing the aggregate demand for products and workers. However, the
economy eventually hits an "inflation barrier" that is imposed by the four other
kinds of unemployment to the extent that they exist. Historical experience suggests
that low unemployment affects inflation in the short term but not the long
term.[18] In the long term, the velocity of money supply measures such as the MZM
("money zero maturity", representing cash and equivalent demand deposits)
velocity is far more predictive of inflation than low unemployment.[19][20]
Some demand theory economists see the inflation barrier as corresponding to
the natural rate of unemployment. The "natural" rate of unemployment is defined
as the rate of unemployment that exists when the labour market is in equilibrium,
and there is pressure for neither rising inflation rates nor falling inflation rates. An
alternative technical term for that rate is the NAIRU, the Non-Accelerating Inflation
Rate of Unemployment. Whatever its name, demand theory holds that if the
unemployment rate gets "too low", inflation will accelerate in the absence of wage
and price controls (incomes policies).
One of the major problems with the NAIRU theory is that no one knows exactly
what the NAIRU is, and it clearly changes over time.[18] The margin of error can be
quite high relative to the actual unemployment rate, making it hard to use the
NAIRU in policy-making.[19]
Another, normative, definition of full employment might be called
the ideal unemployment rate. It would exclude all types of unemployment that
represent forms of inefficiency. This type of "full employment" unemployment
would correspond to only frictional unemployment (excluding that part
encouraging the McJobs management strategy) and so would be very low.
However, it would be impossible to attain this full-employment target using only
demand-side Keynesian stimulus without getting below the NAIRU and causing
accelerating inflation (absent incomes policies). Training programs aimed at
fighting structural unemployment would help here.
To the extent that hidden unemployment exists, it implies that official
unemployment statistics provide a poor guide to what unemployment rate
coincides with "full employment".[18]
Structural unemployment
Okun's Law interprets unemployment as a function of the rate of growth in GDP.
Structural unemployment occurs when a labour market is unable to provide jobs
for everyone who wants one because there is a mismatch between the skills of
the unemployed workers and the skills needed for the available jobs. Structural
unemployment is hard to separate empirically from frictional unemployment
except that it lasts longer. As with frictional unemployment, simple demand-side
stimulus will not work to abolish this type of unemployment easily.
Structural unemployment may also be encouraged to rise by persistent cyclical
unemployment: if an economy suffers from long-lasting low aggregate demand, it
means that many of the unemployed become disheartened, and their skills
(including job-searching skills) become "rusty" and obsolete. Problems with debt
may lead to homelessness and a fall into the vicious cycle of poverty, which means
that people affected in this way may not fit the job vacancies that are created when
the economy recovers. The implication is that sustained high demand
may lower structural unemployment. This theory of persistence in structural
unemployment has been referred to as an example of path dependence or
"hysteresis".
Much technological unemployment,[21] caused by the replacement of workers by
machines might be counted as structural unemployment. Alternatively,
technological unemployment might refer to the way in which steady increases in
labour productivity mean that fewer workers are needed to produce the same level
of output every year. The fact that aggregate demand can be raised to deal with
the problem suggests that the problem is instead one of cyclical unemployment. As
indicated by Okun's law, the demand side must grow sufficiently quickly to absorb
not only the growing labour force but also the workers who are made redundant
by the increased labour productivity.
Seasonal unemployment may be seen as a kind of structural unemployment since
it is linked to certain kinds of jobs (construction and migratory farm work). The
most-cited official unemployment measures erase this kind of unemployment from
the statistics using "seasonal adjustment" techniques. That results in substantial
and permanent structural unemployment.
Frictional unemployment
Frictional unemployment is the time period between jobs in which a
worker searches for or transitions from one job to another. It is sometimes
called search unemployment and can be voluntary, based on the circumstances of
the unemployed individual. Frictional unemployment exists because both jobs and
workers are heterogeneous, and a mismatch can result between the characteristics
of supply and demand. Such a mismatch can be related to skills, payment, work-
time, location, seasonal industries, attitude, taste, and a multitude of other factors.
New entrants (such as graduating students) and re-entrants (such as former
homemakers) can also suffer a spell of frictional unemployment.
Workers and employers accept a certain level of imperfection, risk or compromise,
but usually not right away. They will invest some time and effort to find a better
match. That is, in fact, beneficial to the economy since it results in a better
allocation of resources. However, if the search takes too long and mismatches are
too frequent, the economy suffers since some work will not get done. Therefore,
governments will seek ways to reduce unnecessary frictional unemployment by
multiple means including providing education, advice, training, and assistance such
as daycare centers.
The frictions in the labour market are sometimes illustrated graphically with
a Beveridge curve, a downward-sloping, convex curve that shows a correlation
between the unemployment rate on one axis and the vacancy rate on the other.
Changes in the supply of or demand for labour cause movements along the curve.
An increase or decrease in labour market frictions will shift the curve outwards or
inwards.
Hidden unemployment
Official statistics often underestimate unemployment rates because of hidden, or
covered, unemployment.[22] That is the unemployment of potential workers that
are not reflected in official unemployment statistics because of how the statistics
are collected. In many countries, only those who have no work but are actively
looking for work and/or qualifying for social security benefits are counted as
unemployed. Those who have given up looking for work and sometimes those who
are on government "retraining" programs are not officially counted among the
unemployed even though they are not employed.
The statistic also does not count the "underemployed", those working fewer hours
than they would prefer or in a job that fails to make good use of their capabilities.
In addition, those who are of working age but are currently in full-time education
are usually not considered unemployed in government statistics. Traditional
unemployed native societies who survive by gathering, hunting, herding, and
farming in wilderness areas may or may not be counted in unemployment statistics.
Long-term unemployment
Long-term unemployment (LTU) is defined in European Union statistics as
unemployment lasting for longer than one year (while unemployment lasting
over two years is defined as very long-term unemployment). The United
States Bureau of Labor Statistics (BLS), which reports current long-term
unemployment rate at 1.9 percent, defines this as unemployment lasting 27 weeks
or longer. Long-term unemployment is a component of structural unemployment,
which results in long-term unemployment existing in every social group, industry,
occupation, and all levels of education.[23]
In 2015 the European Commission published recommendations on how to reduce
long-term unemployment.[24] These advised governments to:
encourage long-term unemployed people to register with an employment
service;
provide each registered long-term unemployed person with an individual in-
depth assessment to identify their needs and potential within 18 months;
offer a tailor-made job integration agreement (JIA) to all registered long-term
unemployed within 18 months. These might include measures such
as mentoring, help with job search, further education and training, support for
housing, transport, child and care services and rehabilitation. Each person
would have a single point of contact to access this support, which would be
implemented in partnership with employers.
In 2017–2019 it implemented the Long-Term Unemployment project to research
solutions implemented by EU member states and produce a toolkit[25] to guide
government action. Progress was evaluated[26] in 2019.
Effects
and the persistent unemployment, in which economic inequality increases, has
a negative effect on subsequent long-run economic growth. Unemployment can
harm growth because it is a waste of resources; generates redistributive
pressures and subsequent distortions; drives people to poverty; constrains
liquidity limiting labor mobility; and erodes self-esteem promoting social
dislocation, unrest, and conflict.[80] The 2013 winner of the Nobel Prize in
Economics, Robert J. Shiller, said that rising inequality in the United States and
elsewhere is the most important problem.[81]
Costs
Individual
Unemployment carries a multitude of adverse effects, extending far beyond
mere financial strain. Foreclosure and eviction threaten those unable to meet
their housing payments, potentially leading to homelessness. Moreover,
unemployment significantly impacts physical and mental health, increasing
susceptibility to cardiovascular disease, anxiety disorders, depression, and even
suicide. This trend persists regardless of one's inherent optimism, as evidenced
by a study spanning diverse age groups and life circumstances.
Research has shown that for every 10% rise in unemployment, there is a
corresponding increase in mortality rates and various health issues, including
cardiovascular disease and cirrhosis. Additionally, unemployment correlates
with higher rates of crime, substance abuse, and reliance on welfare programs,
as unemployment benefits often fail to fully replace lost income.
Unemployment can also bring personal costs in relation to gender. One study
found that women are more likely to experience unemployment than men and
that they are less likely to move from temporary positions to permanent
positions.[95] Another study on gender and unemployment found that men,
however, are more likely to experience greater stress, depression, and adverse
effects from unemployment, largely stemming from the perceived threat to
their role as breadwinner.[96] The study found that men expect themselves to be
viewed as "less manly" after a job loss than they actually are and so they engage
in compensating behaviors, such as financial risk-taking and increased
assertiveness. Unemployment has been linked to extremely adverse effects on
men's mental health.[97] Professor Ian Hickie of the University of Sydney said
that evidence showed that men have more restricted social networks than
women and that men have are heavily work-based. Therefore, the loss of a
job for men means the loss of a whole set of social connections as well. That
loss can then lead to men becoming socially isolated very quickly.[98] An
Australian study on the mental health impacts of graduating during an
economic downturn found that the negative mental health outcomes are
greater and more scarring for men than women. The effect was particularly
pronounced for those with vocational or secondary education.[99]
Costs of unemployment also vary depending on age. The young and the old are
the two largest age groups currently experiencing unemployment.[100] A 2007
study from Jacob and Kleinert found that young people (ages 18 to 24) who have
fewer resources and limited work experiences are more likely to be
unemployed.[101] Other researchers have found that today's high school seniors
place a lower value on work than those in the past, which is likely because they
recognize the limited availability of jobs.[102] At the other end of the age
spectrum, studies have found that older individuals have more barriers than
younger workers to employment, require stronger social networks to acquire
work, and are also less likely to move from temporary to permanent
positions.[95][100] Additionally, some older people see age discrimination as the
reason for them not getting hired.[103]
Social
An economy with high unemployment is not using all of the resources,
specifically labour, available to it. Since it is operating below its production
possibility frontier, it could have higher output if all of the workforce were
usefully employed. However, there is a tradeoff between economic efficiency
and unemployment: if all frictionally unemployed accepted the first job that
they were offered, they would be likely to be operating at below their skill level,
reducing the economy's efficiency.[104]
During a long period of unemployment, workers can lose their skills, causing a
loss of human capital. Being unemployed can also reduce the life expectancy of
workers by about seven years.[8]
High unemployment can encourage xenophobia and protectionism since
workers fear that foreigners are stealing their jobs.[105] Efforts to preserve
existing jobs of domestic and native workers include legal barriers against
"outsiders" who want jobs, obstacles to immigration, and/or tariffs and
similar trade barriers against foreign competitors.
High unemployment can also cause social problems such as crime. If people
have less disposable income than before, it is very likely that crime levels within
the economy will increase.
However, beneath these numbers fragility is starting to emerge, the report finds.
It projects that the labour market outlook and global unemployment will both
worsen. In 2024 an extra two million workers are expected to be looking for jobs,
raising the global unemployment rate from 5.1 per cent in 2023 to 5.2 per cent.
Disposable incomes have declined in the majority of G20 countries and, generally,
the erosion of living standards resulting from inflation is, “unlikely to be
compensated quickly”.
Sociopolitical
High levels of unemployment can be causes of civil unrest,[107] in some cases
leading to revolution, particularly totalitarianism. The fall of the Weimar
Republic in 1933 and Adolf Hitler's rise to power, which culminated in World
War II and the deaths of tens of millions and the destruction of much of the
physical capital of Europe, is attributed to the poor economic conditions in
Germany at the time, notably a high unemployment rate[108] of above 20%; see
Great Depression in Central Europe for details.
However the hyperinflation in the Weimar Republic is not directly blamed for
the Nazi rise. Hyperinflation occurred primarily in 1921 to 1923, the year of
Hitler's Beer Hall Putsch. Although hyperinflation has been blamed for
damaging the credibility of democratic institutions, the Nazis did not assume
government until 1933, ten years after the hyperinflation but in the midst of
high unemployment.
Rising unemployment has traditionally been regarded by the public and the
media in any country as a key guarantor of electoral defeat for any government
that oversees it. That was very much the consensus in the United Kingdom until
1983, when Thatcher's Conservative government won a landslide in the general
election, despite overseeing a rise in unemployment from 1.5 million to 3.2
million since the 1979 election.[109]
Remedies
Workers employed
Other federal work projects 554 663 452 488 468 681
Totals
Coverage
65% 74% 53% 71% 72% 93%
(cases/unemployed)
High unemployment rates also make young people vulnerable to crime groups.
Some end up working in dangerous conditions or being forced into illegal activities.
The situation is made worse by inflation and a lack of opportunities. The
government needs to take action to lower inflation, stabilize the currency, and
provide better education and job training for young people. This will help create
more opportunities and reduce stress.
Population growth also needs to be managed, taking lessons from other countries
like Iran and Bangladesh. Empowering women in the workforce is crucial for
economic progress.
The current economic situation discourages people from starting their own
businesses. Encouraging startups and providing a good environment for them is
important for creating jobs. Innovative solutions, like focusing on the gig economy
and supporting startups, can help address unemployment. Technical skills should
be a priority for young people to improve their job prospects. The mismatch
between job requirements and skills needs to be addressed through better
education and training.
There are many reasons why young people in Pakistan don’t have jobs, including
a lack of education, political problems, and economic issues. To fix this, the
government needs to address the root causes and find ways to create more jobs.
Pakistan should also encourage international investors to come to the country
and create more job opportunities. Prioritizing education and job possibilities for
young people is crucial for a better economic future in Pakistan.
Youth unemployment is a big social problem that can lead to crimes, homelessness,
drug addiction, and family tension. It also negatively impacts the economy by
reducing consumption and investment. Managing population growth, empowering
women, and supporting entrepreneurship are key steps to improve the situation.
Many young people in Pakistan don’t have jobs, and this is causing big problems for
the country. There are different reasons for this. First, the government doesn’t
have enough money to spend on creating jobs, especially for young people. Also,
the number of young people looking for jobs is increasing, but there aren’t enough
opportunities. The lack of funds, slow economic growth, and problems with
infrastructure make it even harder to create new jobs. As the population grows,
there are fewer chances for young people to find work. This makes competition for
jobs very tough, and many young people struggle to find good jobs.
This unemployment issue affects both rural and urban areas in Pakistan. The future
of the country and its progress are at risk because many young people can’t find
work. Pakistan has a lot of young people, around 62 million, but about half of them
don’t have jobs. This is one of the highest rates of youth unemployment in the
world. One reason for this is that not many people in Pakistan have formal
education, only 43 percent. Because of this, many young people can’t find jobs that
match their skills and qualifications. The lack of good education and training
programmes also means that young people don’t have the skills they need for many
jobs. This leads to long-term unemployment, where people can’t find meaningful
work.
Pakistan’s economy is not doing well, and there isn’t much money to create new
jobs. The country also has a weak job market with low wages and job security. Many
young people end up in poorly paid and insecure jobs that don’t provide enough
for them or their families. The informal sector, which is not well-regulated, doesn’t
offer good job opportunities for young people either.
Political problems in the country make it harder for businesses to grow and invest,
creating even fewer job opportunities. Many young people also lack resources like
money, technology, and mentors to help them find good jobs. The government’s
lack of investment in key areas like industry and agriculture also means fewer job
possibilities.
Another big issue is that many young people can’t get loans or money to start their
own businesses. The country’s financial sector is not well-developed, making it hard
for young people to become entrepreneurs. The recent covid-19 pandemic has
made things worse by causing many companies to close down, leading to more job
losses.
There are many reasons why young people in Pakistan don’t have jobs, including a
lack of education, political problems, and economic issues. To fix this, the
government needs to address the root causes and find ways to create more jobs.
Pakistan should also encourage international investors to come to the country and
create more job opportunities. Prioritizing education and job possibilities for young
people is crucial for a better economic future in Pakistan.
Lack of education:
Pakistan's education system is not up to date and many lack the skills and education
needed for the job market. This has resulted in a shortage of skilled professionals
in various industries and fields, resulting in scarce employment opportunities.
Pakistan's economy has been sluggish for many years and slowing growth has not
created enough jobs to keep up with demand. The country's agricultural sector,
which employs most of the population, also suffers from a variety of factors,
including water scarcity and inefficient farming practices.
Political instability:
Pakistan has a history of political instability that has created an unfavorable
business environment. Investors are reluctant to invest in the country, resulting in
a shortage of job opportunities.
Political instability is a long-standing problem in Pakistan, which has a turbulent
political history since its inception in 1947. This essay examines the causes and
effects of political unrest in Pakistan and considers possible solutions to address
the problem.
Military intervention:
One of the main causes of political instability in Pakistan is military intervention in
politics. Pakistan has a long history of military coups and interventions that have
disrupted democratic processes and undermined the rule of law.
Corruption:
Corruption is another factor contributing to Pakistan's political instability. Pervasive
corruption has undermined public confidence in government and undermined the
legitimacy of democratic institutions.
Ethnic and Religious Divisions:
Pakistan is a diverse country with different ethnic and religious groups. Ethnic and
religious divisions often lead to political instability and violence, especially in
Balochistan and Sindh.
Weak Democracy:
Political instability has weakened Pakistan's democratic institutions, including the
judiciary, parliament and media. This lacks government accountability and
transparency and undermines public trust in democracy.
Economic instability:
Political instability is also having a negative impact on Pakistan's economy. Foreign
investors are often reluctant to invest in politically unstable countries that limit
Pakistan's economic growth and development.
Terrorism and Extremism:
Political instability has created a breeding ground for terrorism and extremism in
Pakistan. Extremist groups are using the political vacuum to launch attacks and
recruit new members.
Social anxiety:
Political instability has caused social unrest and protests, especially in rural areas.
This often resulted in violence and death.
Poverty:
Unemployment leads to poverty and many people in Pakistan live below the
poverty line. This has led to increased crime rates and lower living standards.
Brain Drain:
Social question:
Economic instability:
Education:
Government must invest in the education system to give people the chance to
acquire the skills they need for the labor market. This can be achieved by offering
scholarships and vocational training programs.
Investment in infrastructure:
Promoting Entrepreneurship:
Government should encourage entrepreneurship by providing loans and training
programs to budding entrepreneurs. This will create employment and lead to the
creation of SMEs that can contribute to the economy.
Economic diversification:
Pakistan needs to diversify its economy and reduce its dependence on the
agricultural sector. This can be achieved by boosting industries such as IT, tourism
and manufacturing.
BALUCHISTAN:
SINDH:
Sindh, one of the largest provinces in Pakistan, is grappling with a
concerning issue—the high rate of educated youth unemployment.
According to recent research conducted by Gallup Pakistan and PRIDE, using
data from the Labour Force Survey 2020-21, it has been found that a significant
percentage of unemployed urban youth in Sindh hold university degrees. This
revelation raises questions about the effectiveness of the education system and
the availability of employment opportunities for educated youth in the
province.
The study reveals that within Sindh, the overall unemployment rate among
youth stands at 3.9%. While this rate might seem relatively low, the analysis of
the labour force survey data by division uncovers regional disparities.
The Karachi division, with the largest population in Sindh, exhibits the highest
youth unemployment rate of 11.18%. In contrast, the Larkana division records
the lowest rate of 3.4%. These numbers highlight the need for targeted
measures to address unemployment in specific regions.
Furthermore, the research demonstrates a disconcerting trend—a higher share
of educated youth are unemployed compared to their less-educated
counterparts in Sindh. Specifically, 23.6% of all unemployed urban youth in the
province hold a university degree. This disparity raises concerns about the
relevance of education and whether the current curriculum adequately prepares
students for the job market.
Khyber Pakhtunkhwa
With the claim of a decline in the unemployment rate at the national level, the PTI-
led Khyber Pakhtunkhwa province tops for having an 8.8 percent unemployment
rate among all the four provinces during the financial year 2020-21.The Labor Force
Survey (LFS) released by the Pakistan Bureau of Statistics (PBS) showed that the
unemployment rate in Pakistan improved and stood at 6.3 percent in 2020-21
against 6.9 percent in 2018-19.The breakdown of the unemployment rate among
the four provinces showed that in the KP province, where the PTI ruled for the last
nine years, the unemployment rate has gone up to 8.8 percent in 2020-
21.Although, the unemployment rate stood at 10.3 percent in KP during the fiscal
year 2018-19, but if the unemployment rate in KP is compared with 2017-18, it
stood at 7.2 percent. It indicates that the unemployment rate increased in KP in
2020-21, if compared with the fiscal year 2017-18. But it got improved if compared
with the fiscal year 2018-19.The unemployment rate in KP stood at 8.6 percent in
accordance with LFS 2012-13, so in the last nine years, it increased from 8.6 percent
to 8.8 percent. The PTI-led government failed to check the unemployment rate, but
secured a majority and formed the government in the province for second time by
winning the last general elections in 2018.
PUNJAB:
The latest research conducted by Gallup Pakistan and PRIDE has
unveiled concerning statistics regarding youth unemployment in
Punjab, with an overall unemployment rate of 6.69%.
The survey, based on data from the Labour Force Survey 2020-21, highlights
gender and regional disparities in unemployment rates.
According to the findings, the unemployment rate among females is
significantly higher than that among males, standing at 8.32% and 6.06%,
respectively.
Furthermore, urban residents face a relatively higher unemployment rate
compared to their rural counterparts, with rates of 7.94% and 6.11%
respectively.
The analysis of divisionwise youth unemployment rates in Punjab reveals
significant variation, ranging from as low as 4.45% in Bahawalpur division to a
staggering 17.78% in Rawalpindi division.
The distribution of unemployed youth by education level highlights that those
with a ‘matric but below Intermediate’ education constitute the highest
proportion of unemployed youth at 20.01%.
On the other hand, youth with ‘less than one year of education’ represent the
lowest share of unemployed youth at 0.39%.
An alarming finding from the research indicates that approximately 23.52% of
unemployed female youth in Punjab hold a Master’s degree, a share over seven
times higher than that of unemployed males with the same level of education,
which stands at around 3%.
The study also reveals the population distribution in different divisions of
Punjab, with Lahore division having the highest population of 20.7 million and
Sahiwal division the lowest at 7.9 million.
Gujranwala division boasts the highest rural population of 10.9 million, while
the Lahore division has the highest urban population of 14.4 million in the
province.
The youth population of Punjab alone is equivalent to the entire population size
of Canada.
Gallup Pakistan Executive Director, Bilal Gilani expressed concern over the
higher unemployment rates among educated youth compared to their less
educated counterparts.
He emphasised the need for education to deliver tangible outcomes to prevent
potential dropouts and address the challenges posed by a large pool of
unemployed urban youth.
PRIDE CEO, Dr Lubna Shahnaz, highlighted the importance of disaggregated
statistics at the divisional level to gain a deeper understanding of the labour
market dynamics in different regions.
She emphasised that such data would facilitate the development of targeted
policies and programs at the grassroots level.
The collaboration between Gallup Pakistan and PRIDE aims to analyse and
disseminate policy-relevant economic and social data to contribute to informed
decision-making processes in Pakistan.