Unemployment is one of the most pressing issues in Pakistan, and it has become a major challenge for the country’s youth. Despite producing a large number of highly educated graduates, there are limited employment opportunities available to them.
Currently, the unemployment rate in Pakistan stands at 6.3%, with over 4.51 million people struggling to find work, according to reports and surveys.
Labor force surveys
The latest available Labor Force Surveys (LFS) for Pakistan in 2020-21 show a total labor force of 71.76 million, with 48.5 million in rural areas and 23.2 million in urban areas. Of the total labor force, 67.25 million are employed, with 45.7 million in rural areas and 21.5 million in urban areas, according to Business Recorder.
Since its inception in 1963, the Pakistan Bureau of Statistics (PBS) has been conducting Labor Force Surveys (LFS). However, due to the engagement of PBS with the 7th Population and Housing Census, LFS for the year 2022-23 could not be undertaken. Currently, work is underway for the LFS 2024-25.
Over the decades, there has been a significant shift in Pakistan’s employment structure due to technological transformation. The agriculture sector has witnessed a decrease in employment (37.4 percent), while the industry and services sectors have seen an increase.
In particular, the services sector has emerged as the largest growing sector, with a share of 37.2 percent in total employment for 2020-21.
Youth unemployment rate
When it comes to unemployment, data categorized by age and gender reveals that the youth between ages 15-24 have the highest unemployment rate at 11.1 percent. This rate is further broken down into 10.0 percent for males and 14.4 percent for females.
The second-highest unemployment rate is found among the age group of 25-34 years, with a rate of 7.3 percent. Within this group, 5.4 percent of males and 13.3 percent of females are unemployed.
It is concerning to note that unemployment is more prevalent among females, especially those between the ages of 15-24.
This situation not only leads to a struggle to find employment opportunities but also restricts their learning opportunities and could potentially lead to an increase in discouraged workers.
Pakistani workers play a crucial economic role by sending remittances back to their home country. These remittances serve as a vital source of income for many households in Pakistan, contributing to poverty alleviation, improving living standards, and stimulating consumption.
As of April 2024, more than 13.53 million Pakistanis have gone abroad through official procedures to work in over 50 countries. The majority (96 percent) of Pakistani registered workers for overseas employment were employed in Gulf Cooperation Council (GCC) countries, with Saudi Arabia and the United Arab Emirates being the top destinations.
These migrant workers not only contribute to the development of Pakistan’s economy by sending remittances but also help bridge the gap between supply and demand for labor in these countries.
In 2023, both the Bureau of Emigration and Overseas Employment (BE&OE) and Overseas Employment Corporation (OEC) registered a total of 862,625 workers for overseas employment. This marked an overall increase of 4 percent compared to the previous year.
Out of these registered workers, the highest number came from Punjab (489,301), followed by Khyber-Pakhtunkhwa (210,150), Sindh (72,382), tribal areas (36,609), Azad Jammu and Kashmir (33,904) and Gilgit-Baltistan (1,551).
According to data from the BE&OE, more than half of these workers (49.5 percent) moved to Saudi Arabia for employment, followed by the United Arab Emirates (26.7 percent). Other popular destinations include Oman, Qatar, Bahrain, and Malaysia.
In terms of skill level, there has been an increase in highly skilled workers who went abroad for employment from 2022 to 2023. This positive trend reflects the importance of upskilling and workforce certification to meet international standards and demand.
Opinion:
To address unemployment, Pakistan needs to improve its education system and promote skill development among its youth. Additionally, policies must be implemented to encourage industrial growth and discourage corruption in the employment sector.
With proper strategies and efforts toward addressing these underlying issues, Pakistan can overcome its economic challenges and pave the way for a brighter future with more employment opportunities for its citizens.
Overall, there is hope that through targeted measures and effective governance, Pakistan can improve its economic situation and create a better future for all.
