UNEMPLOYMENT

Presented by:
Gulam Fatima 23020920-243
Zain Ali 23020920-161
M.Shahbaz 23020920-144
Esha Iman 23020920-162
Kiran shehzadi 23020920-247
Ameerah Naveed 23020920-240
UNEMPLOYMENT IN
PAKISTAN
GE-103
23020920-243
 INTRODUCTION
• Unemployment is a significant issue in Pakistan, affecting many individuals
and families. It occurs when people who are willing and able to work are
unable to find suitable employment opportunities. There are various reasons
for unemployment in Pakistan, including a growing population, lack of
education and skills matching job requirements, limited job opportunities,
and economic instability.
The government and various organizations in Pakistan are working to address
unemployment through initiatives such as skill development programs, job
creation projects, and promoting entrepreneurship. Despite these efforts,
unemployment remains a pressing challenge in the country, impacting the
economy and the well-being of many citizens.
 TYPES:
1. *Structural Unemployment:* This occurs when there is a mismatch between
the skills possessed by the workforce and the skills required by employers. It
often results from changes in technology or shifts in the economy.
2. *Cyclical Unemployment:* This type of unemployment is related to the
business cycle. During economic downturns, businesses may cut jobs, leading
to a rise in unemployment. When the economy improves, this type of
unemployment decreases.
TYPES:
3. *Seasonal Unemployment:* In sectors where demand fluctuates based on
the season, such as agriculture or tourism, seasonal unemployment occurs.
Workers may be unemployed during off-season period.
4. *Frictional Unemployment:* This type of unemployment happens when
individuals are between jobs or entering the workforce for the first time. It is
temporary in nature as people search for better job opportunities.
Each type of unemployment presents its challenges and requires specific
Strategies to address Effectively.
 Zain Ali
23020920-161

Topic: Factor of Unemployment in Pakistan

Factor of Unemployment in Pakistan

1. Lack of Skills
Many Pakistanis do not have the skills
required to get a job.
2. Low Wage
Low wages discourage people from
working.
3. Lack of education
The literacy rate in Pakistan is only
58%, and many Pakistanis do not have the
education required to get a job.
4. Population growth
The population of Pakistan is increasing rapidly, leading to a shortage of
jobs.

5.Foreign direct investment

Foreign investment in Pakistan is low, leading to a lack of job
opportunities.

6. Interest rate
High interest rates make it difficult for businesses to borrow money
and create jobs.
8. Poverty rate
The poverty rate in Pakistan is high, leading to a lack of job
opportunities.

9. Gross domestic product

Pakistan’s GDP is low, leading to a lack of job opportunities.
Population Growth:
Rapid population growth outpaces the creation of job opportunities,
leading to higher unemployment rates.

Economic Instability:
Frequent economic crises and inconsistent economic policies result in job
losses and hinder job creation.

Lack of Industrialization:
Limited industrial development fails to absorb the growing labor force,
contributing to unemployment.

Energy Crisis:
Persistent energy shortages disrupt industrial and commercial activities,
leading to reduced employment opportunitie.
Inadequate Education System:
The education system often does not align with market needs, producing
graduates with skills that do not match job requirements.

Political Instability:
Frequent changes in government and political unrest create an uncertain
business environment, discouraging investment and job creation.
 Unemployment rates in Pakistan

❖ Unemployment Rate in Pakistan decreased to 6.30 percent in 2021 from 6.90

percent in 2019.
❖ Unemployment Rate in Pakistan averaged 5.72 percent from 1986 until
2021.
❖ Highest unemployment rate in Pakistan was 8.30 percent in 2003.
❖ Lowest unemployment rate in Pakistan was 3.10 percent in 1988.
❖ Unemployment Rate in Pakistan is expected to reach 6.80 percent by the end
of 2023.
❖ In the long-term, the Pakistan Unemployment Rate is projected to trend
around 7.20 percent in 2024 and 6.90 percent in 2025.
 Causes of unemployment:

Economic recession:
During economic downturns, businesses face reduced
demand for goods and services, leading to layoffs and reduced hiring.

Technological Advancements:
Automation and new technologies can render
certain jobs obsolete, leading to job losses for those whose skills are no longer in demand.

Seasonal Unemployment:
Some industries, such as agriculture or tourism, experience fluctuations
in employment due to changing seasons.

Globalization:
Competition from overseas companies and outsourcing of jobs to
countries with cheaper labor can reduce job opportunities domestically.
Mismatch of Skills:
When there is a gap between the skills that employers need and the
skills that workers possess, it leads to structural unemployment.

Lack of Education and Training:

Individuals without adequate education or vocational training
may struggle to find employment in a competitive job market.
 EFFECTS OF
UNEMPLOYMENT
Economic Effects*-

1. Government Spending Increases

: Governments spend more on unemployment benefits, reducing funds for
other services. –
2. Consumer Spending Decreases:
People have less money to spend, leading to a decline in sales for businesses.
–
3. Example: Reduced Demand for Non-Essential Goods: People prioritize
essential items like food and rent over luxury items.
Social Effects*-
4. Rise in Crime Rates: Unemployment can lead to an increase
in theft, vandalism, and other crimes as people struggle
financially.-

5. Negative Impact on Mental Health: Unemployment can

cause stress, depression, and feelings of worthlessness.

6. Example: Increased Stress and Anxiety: The uncertainty of

not having a job can lead to mental health issues.-

7. Impact on Family Relationships: Financial strain can lead

to conflicts and strain relationships within families.
Individual Effects*
- 8. Loss of Skills: Long periods of unemployment can
lead to a loss of skills and decreased employability.-
9. Impact on Physical Health: Stress from unemployment
can contribute to health problems like high blood pressure
and heart disease.-
10. Example: Loss of Confidence: Being unemployed for
a long time can make individuals feel less confident in
their abilities.-
11. Effect on Future Employment Prospects: Extended
periods of unemployment can make it harder to find a job
in the future.
 STEPS TAKEN TO ADDRESS
UNEMPLOYMENT

Improving Education and Skills:

Investing in education and vocational training to match skills with job market
needs.
Countries with higher education levels generally exhibit lower unemployment
rates. Example: Germany's vocational training programs contribute to its low
youth unemployment rate of 5.6% (2023)
Promoting Entrepreneurship:
Encouraging self-employment and new business startups through financial
incentives and support programs.- *Data:* - Small businesses account for
64% of new jobs in the USA over the last two decades .
Strengthening Economic Policies:

Implementing policies that foster economic growth,

such as tax incentives for businesses, infrastructure
investments, and trade policies The American
Recovery and Reinvestment Act (2009) helped reduce
the unemployment rate from 10% in 2009 to 4.1% by
2017

Enhancing Labor Market Flexibility:

Reforming labor laws to make hiring and firing easier,

reducing bureaucratic red tape for businesses.- *Data:*
- Denmark's "Flexicurity" model balances labor market
flexibility with social security, maintaining low
unemployment rates around 3.7% (2023) .
Expanding Public Works Programs:
-Government-funded projects aimed at infrastructure
development, creating temporary employment.
India's Mahatma Gandhi National Rural Employment Guarantee
Act (MGNREGA) provides employment to over 80 million rural
households annually

Encouraging Foreign Investment:

Creating a favorable environment for foreign direct investment

(FDI) to spur job creation.Inward FDI stocks in developing
countries have led to significant employment growth,
e.g., Vietnam's FDI inflows have created over 3 million jobs .