CAUSES OF UNEMPLOYMENT IN PAKISTAN

ASMA BERJEES
THE RESEARCH REPORT IS AS PER REQUIREMENT FOR THE AWARD OF THE B.SC (HONOURS) DEGREE. In ECONOMICS KINNAIRD COLLEGE FOR WOMEN LAHORE SESSION: 2004-2008

RESEARCH COMPLETION CERTIFICATE

It is certified that Ms Asma Berjees of the final Semester (Session 2004-2008), Department of Economics has carried out this research work entitled Causes of Unemployment in Pakistanunder my supervision. It is assured that this research work is original and has not been published anywhere.

Ms. Saima Malik Supervisor (Lecturer of Economics)

Date: _____________

ACKNOWLEDGMENT
This is a token of my gratitude for all those who at any stage and in any possible way helped me and make this research a reality. First and foremost my utmost gratitude and thanks to Almighty Allah who enabled me not only to complete this research work but also blessed me in countless ways throughout my life. I pay honor to His Prophet Hazrat Muhammad (PBUH) who is forever a torch of guidance and light of knowledge for mankind and teaches us high ideas of life. Deep gratitude and appreciation to my research advisor Ms. Saima Malik, for helping me to render this research work. It was a matter of great honour for me to work under her able supervision. I am highly thankful to her infinite knowledge, guidance, valuable advices, help and everything she taught me inspite of her busy schedule. I also pay my heartiest obligation and thanks to Mrs. Shahida Saleem , Head of Economics Department, Kinnaird College for Women, Lahore who provided me all possible facilities for research work. She is an extraordinary intelligent professor. Special thanks to my family and friends for their love, support, and encouragement. Lastly, I would like to dedicate this piece of research work to my parents whom I consider assets of my life. Sincere Thanks Asma Berjees

ABSTRACT
This research report presents results that are examined to see that what are the main factors that causes increase in the unemployment rate in Pakistan. The research report explains the relationships of the factors that causes increase in the rate of unemployment and unemployment rate. Based on past studies, it is just a small effort to carry out a research on this topic. In this report, certain variables are identified on the basis of having greater impact on unemployment rate and also which can be easily quantified. In order to analyze the variables associated with unemployment rate a detailed review of the work done by previous researchers on the topic of unemployment was done. Secondary data sources have been used and data has been collected from 19902007 from the Economic Survey of Pakistan. Variables taken are investment growth rate, illiteracy rate, and population growth rate. The objective of this study is to test the hypothesis that whether population growth rate, illiteracy rate, and investment growth rate causes an increase in the rate of unemployment in Pakistan. Multiple regression analysis has been carried out to see the relationships among unemployment rate and the variables selected. Our results show positive relationship of unemployment rate with illiteracy and population growth rate while a negative or inverse relationship between investment growth rate. Thus, the above given factors cause serious impact on the unemployment rate. Unemployment is a hurdle in the economic growth of the country. The government on its part must identify and promote sectors, which are considered not only to be the major drivers of growth but also have the greatest potential of creating more employment opportunities. In order to sustain this spectacular pace of growth and maintain healthy and vigorous macroeconomic indicators would require a prolonged period of macroeconomic stability, financial discipline, and consistent and transparent policies.

TABLE OF CONTENTS
TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION 1.1 TYPES OF UNEMPLOYMENT 1.2 UNEMPLOYMENT SECNARIO IN PAKISTAN 1.3 CAUSES OF UNEMPLOYMENT IN PAKISTAN 1.3.1 POVERTY 1.3.2 ILLITERACY 1.3.3 POLITICAL INSTABILITY 1.3.4 INEQUALITY OF INCOME 1.3.5 FOREIGN DIRECT INVESTMENT 1.3.6 LOW LEVEL OF INVESTMENT 1.3.7 ABSENCE OF TECHNICAL EDUCATION 1.3.8 LOCAL LABOR MARKET CONDITIONS 1.3.9 HIGH RATE OF POPULATION GROWTH 1.3.10 NATURAL DISASTER 1.3.11 LOW TECHNOLOGICAL PROGRESS 1.3.12 LESS OPPORTUNITIES OF EMPLOYMENT CHAPTER 2: LITERATURE REVIEW CHAPTER 3: OBJECTIVE OF THE STUDY
3.1 PROBLEM STATEMENT

PAGE NO. 4 5 11 11 12 12 12 13 13 13 13 14 14 14 14 16

20 20 20

3.2 OBJECTIVE OF THE STUDY 3.3 TYPE OF INVESTIGATION CHAPTER 4: METHODOLOGY 4.1 SOURCE OF DATA 4.2 METHODOLOGY

21 21

4.3 VARIABLE SELECTION CRITERIA 4.4 THEORETICAL FRAMEWORK 4.5 EXPLANATION OF THEORETICAL FRAMEWORK CHAPTER 5: DATA INTERPRETATION AND DISCUSSIONS 5.1 RUNNING A LINEAR MULTIPLEREGRESSION 5.2 REGRESSION ANALYSIS 5.3 INTERPRETATION OF MULTIPLE REGRESSION RESULTS

21 22 24

25 25 26

CHAPTER 6: CONCLUSIONS AND RECOMMENDATIONS 6.1 CONCLUSION 6.2 LIMITATIONS OF THE STUDY 6.3 RECOMMENDATIONS 29 30 31

REFERENCES APPENDIX

34 36

LIST OF TABLES
TABLES TABLE NO 1.1 CIVILIAN LABOR FORCE, EMPLOYED AND UNEMPLOYED OF PAKSIATAN TABLE NO 1.2 EMPLOYED WORK FORCE WITH MAJOR OCCUPATIONAL GROUPS TABLE NO 5.1 TABLES ENTERED/REMOVED TABLE NO 5.2 MODEL SUMMARY TABLE NO 5.3 ANOVA TABLE NO 5.4 COEFFICIENTS 10 26 26 27 28 5 PG NO.

LIST OF FIGURES
FIGURES PG NO.

FIGURE 1.1 DISTRIBUTION OF LABOR FORCE BY SECTOR FIGURE 4.1 THEORETICAL FRAMEWORK

8 23

CHAPTER 1 INTRODUCTION

Unemployment is a major social and economic problem. Unemployment is a situation where the total number of vacancies is much less than the total number of jobseekers in the country. Unemployment is the major cause that proves as a hurdle for the development in the country. Unemployment is a central problem because when unemployment is high, resources are wasted and people's incomes are depressed; during such periods, economic distress also spills over to affect people's emotions and family lives. There are many seekers but few jobs. In a society where who you know has replaced what you know as the major criteria for jobs, chances of employment are bleak due to massive downsizing in the public sector. Tens of thousands of graduates leaving the universities every year are finding it harder to find a suitable employment. Not only it is hard to find a job but the high level of unemployment has also hurt those already employed in a distinct way. With the abundance of workers the employers have leverage to hire and fire at will, play loose with the benefits and offer lower salaries and those who are not satisfied with the working conditions are always welcome to leave. Of course, there are thousands who are willing to fill the space at whatever the salary may be. Unemployment undermines the economic and social stability of any society. Societies which fail to provide gainful and secure employment to their people invite political instability, social unrest and economic insecurity. The link between unemployment and crime has also been well established. Employment is also directly related to all industrial and trade activities. These activities slow down when there is a high level of unemployment but increases when it is low. In an inter-dependent world the unemployment issue has taken a global perspective. This is evident from the following example: The average annual rate of growth in global exports was 6.6 per cent during 1965-80. It declined to 4.1 per cent between 1980-91. The unemployment rate may be different from the impact of the economy on people. The unemployment figures indicate how many are not working for pay but seeking employment for pay. It is only indirectly connected with the number of people who are

actually not working at all or working without pay. Therefore, critics believe that current methods of measuring unemployment are inaccurate in terms of the impact of unemployment on people as these methods do not take into account the 1.5% of the available working population incarcerated in U.S. prisons (who may or may not be working while incarcerated), those who have lost their jobs and have become discouraged over time from actively looking for work, those who are self-employed or wish to become self-employed, such as tradesmen or building contractors or IT consultants, those who have retired before the official retirement age but would still like to work (involuntary early retirees), those on disability pensions who, while not possessing full health, still wish to work in occupations suitable for their medical conditions, those who work for payment for as little as one hour per week but would like to work full-time. Over the years, many less developed nations and the developing nations have tried to wipeout the intensity of unemployment, which seems quite prevalent and widespread among these countries. The reasons and causes for this have remained subject to different interpretations depending upon the specifications, demographics, and regional profiles of different countries, thus the perceptions regarding having a plausible solution lacks concurrency. The level of unemployment is moving up. The socio economic system of the country and institutions has failed to provide employment to the increasing labour force. The ILO reports that unemployment worldwide hit a record high last year of 185.9 million people worldwide, or 6.2 percent of the global labor force. In fact, unemployment is a two dimensional problem: the demand side and the supply side. The overall unemployment is higher in the highly literate ethnic groups. So, in short term, the creation of employment opportunities for educated and young segment is a basic requirement to reduce ethnic disparities. To reduce the differential of unemployment rates between the ethnic groups is a logical way to reduce the demand and supply gap in the labor market of the intermediate degree holders. It will be a long-term solution. The socio-economic fall out of the high unemployment rate is evident from the drastic increase in the crime wave. Today robberies, dacoities and kidnapping for ransom have

become a fearsome fixture of life in the country. The resultant lack of civil peace and the rule of the law undermines the very basis of all industrial, economic and trade activities in the country. The case for sustainable development for employment can hardly be argued more forcefully. Increasing poverty is forcing people even to the extent of committing suicides. Price hikes have made life impossible--never was this statement more true than it is today. A huge group of middle class, the entire lower middle class and lower class are unable to purchase the basic necessities of life. These price hikes are not likely to be for the legislators and the elite; it is always the masses that must shoulder these burdens. Nationalization of industrial units very badly affected the investment industrial sector. The private investor shifted their capital to other countries. Employment in the private sector absolutely stopped for many years. The higher growth rate of population is the major causes of unemployment. The population has exceeded the optimum level. The resources of the country are limited. Employment cannot be provided to the increasing labour force.

The cottage industries in rural areas had been faded out by the machine made goods. The artisans have been rendered unemployed. Educated young men like white collar jobs. They do not like to perform manual labour. The higher age of retirement in government services has blocked the employment of educated young men. Re-employment of civil and military high-ranking offices in government corporations and agencies deprives the qualified men from employment. Economy is not showing any substantial growth; infact, we fail to achieve the targeted GDP each year and the manufacturing sector for several years running are showing negative growth. Unfortunately, as economy goes from bad to worse, unemployment obviously shows no sign of abating. Political instability is one with the successive governments failing to come up with any substantial plan to tackle growing unemployment. There is a vicious cycle of unemployment and the mandarins at the top do not have a clue as to how to reduce it.

Unemployment is caused by many factors in a modern market economy. It can be caused by rapid technological change, business cycle or recessions, seasonal factors in some industries particularly such as changes in tastes and climatic conditions which affects demand for certain products and services, individual perceptions and willingness to work and search for jobs, their values and attitudes towards some jobs and about employers, accessibility for retraining and acquisition of work skills, willingness and perception of unemployed of the benefits of training and the possibility for them to get a job after the training even though they have a chance to get a job, discrimination in the workplace based on race, color, religion, ethnicity, age and class. It can be seen from the above causes unemployment in a particular period can be a combination caused by social factors and how the economy as a whole works and also due to the subjective individual factors. In a sociological point of view according to functionalist and conflict theorists the unemployment is caused primarily by the social factors than by the individual factors. However according to Max Weber and symbolic interaction theories individuals construct their own social constructs and perception and they can be subjective in their behaviour and therefore can become unemployed even though the actual condition they can get a job in the job market. In summary applying the sociological and the primary causes of unemployment is individual as well as a social problem in a market economy. As discussed above it is caused by the society as well as by individuals. Even the economy or societal factors are not present unemployment can be caused by individual perception and their own subjective behavior.

1.1 TYPES OF UNEMPLOYMENT

There are seven types of unemployment: Frictional unemployment occurs when a worker moves from one job to another. While he searches for a job he is experiencing frictional unemployment. Structural unemployment is caused by a mismatch between the location of jobs and the location of job-seekers. "Location" may be geographical, or in terms of skills. The mismatch comes because unemployed are unwilling or unable to change

geography or skills. Cyclical unemployment, also known as demand deficient unemployment, occurs when there is not enough aggregate demand for the labor. This is caused by a business cycle recession. Technological unemployment is caused by the replacement of workers by machines or other advanced technology. Classical or realwage unemployment occurs when real wages for a job are set above the market-clearing level. This is often as a result of government intervention, as with the minimum wage, or unions. Some, such as Murray Rothbard, suggest that even social taboos can prevent wages from falling to the market clearing level. Marxian unemployment is needed to motivate workers to work hard and to keep wages down. Seasonal unemployment occurs when an occupation is not in demand at certain seasons.

1.2 UNEMPLOYMENT SCENARIO IN PAKISTAN

In Pakistan unemployment rate is increasing in both rural and urban areas in absolute as well as in percentage terms. Unemployment rate in rural areas is greater as compared to Urban areas. Because of industries there are more chances of employment in Urban areas. In Rural areas businessmen are setting up industries due to which now rural people seek Manufacturing sector for employment. As in rural areas there is no proper source of earnings due to which unemployment rate is increasing. As agriculture sector is not absorbing them due to adaptation of mechanical instruments and bad conditions. Small scale industries are not working efficiently due to worse economic conditions. So Rural people are not finding proper source of earning. It is clear from Percentage distribution of employed persons by major industries division. In Pakistan, unemployment is of structural and cyclical nature. TABLE 1.1 Civilian Labor Force, Employed and Unemployed of Pakistan (No. in million)

1999-2000 Labor Force 39.4

2001-2002 42.39

2003-2004 45.23

Employed Unemployed

36.32 3.08

38.88 3.51

41.75 3.48

Source: Labor Force Survey 2001-02 and 2003-2004 The Pakistan economic survey (Government of Pakistan: 1990) has been showing a constant rate of unemployment at 5.4 percent, but the World Bank (1990) sources mentioned 18 percent rate of unemployment in Pakistan. The big difference is occurred due to discrepancies in definition and quantification methodologies. The hidden unemployment in the rural areas of Pakistan is not included in the rate of unemployment. The barter system and availability of foodstuff without monetary cost conceal the actual unemployment in the rural areas in some cases. According to Labour Force Survey 1996-97, the rate of open unemployment was 6.1 percent and 5.4 percent as per Labour Force Survey of 1994-95. This indicates that rate of unemployment has increased between these two surveys by 0.7 percent officially but unofficially unemployment is much larger than this rate. Often it is perceived that unemployment rate of rural areas is greater because in rural areas there are less chances of employment as compared to urban areas where there are more chances of employment due to more industries. From Okun's law we know that for every 2% fall in GNP relative to potential GNP, the unemployment rate rises by 1% point. High unemployment is a symptom of waste for during recessions, when unemployment is high, the economy is not producing up to high level. When economy is not producing sufficiently, we can say that we are unable to use our full resources for production purposes. Economy will not grow as fast as it can if become able to produce at high level. However large the cost to economy of unemployment, a recounting of Rupees lost does not adequately convey the human, social and psychological toll that periods of persistent involuntary unemployment bring. Although unemployment has plagued capitalism, the

Industrial Revolution, understanding its causes and costs has been possible only with the rise of modern macroeconomic theory. It is apparent that recessions and the associated high unemployment are extremely costly to the economy. Understanding the sources of unemployment has proved one of the major challenges of modern macroeconomics. Voluntary unemployment may be or when qualified people chose not to work out the going wage rate unemployment occur. The key element in understanding involuntary unemployment is the inflexibility of wages in the face of economic shocks. The same situation is in Pakistan, inflexibility arises because of costs involved in administering the compensation system. The upward creep in the natural rate arises mainly because of demographic trends particularly the higher proportion of teenagers in the labour force. In addition, government policies are also increasing unemployment rate i.e. Golden Shake Hand, ban on jobs increasing unemployment rate. The government is trying to reduce the unemployment rate. Under Prime Minister's Self Employment Scheme, different Banks and Small Business Finance Corporations are extending loans to unemployed youths and skilled professionals having diploma/degree and business experience. Loans ranging from Rs.10,000 to be Rs.500,000 for small business and from Rs.500,000 to Rs.5,000,000 for small industries etc. Small Business Finance Corporation is playing role in reducing unemployment. Up to March 1999, the Small Business Finance Corporation has sanctioned Rs.2,208.4 million, against amounting to Rs.1,551.95 million have been disbursed to 9,383 persons. The SBFC has generated employment for 28,149 persons under the Prime Minister's SelfEmployment Scheme up to March 31, 1999. A Small and Medium Enterprises Development (SMEDA) has been setup for growth and development of self-employment schemes in Pakistan. During the year 1998, about 104,000 persons have been sent abroad for employment under Govt. overseas employment schemes.

FIGURE 1.1Distribution of Labor Force by sector:

2005

Agriculture Mining & Manufacturing Construction Transport Trade Others

2006

Agriculture Mining & Manufacturing Construction Transport Trade Others

Source: Labor Force Survey 2005-06 and 2006-2007 The liberal economic and fiscal policies of the government may reduce unemployment rate because they can create new job opportunities and business in the country. There is a need to announce an economic revival package to stimulate investment and industrial production, boost exports, and broaden the tax bases and lower tariffs. In addition, construction of additional motorways and setting up of industrial zones throughout the country would also generate new opportunities for employment in the country. One of the primary aims of any government should be the elimination of unemployment. Although achieving zero level unemployment is not only highly impossible but also undesirable at various levels to check the inflationary trend. It is imperative that all governmental policies need to be directed towards achieving this goal. Identifying the problem is the first step towards successfully solving it. However, a look at officially compiled statistics shows that unemployment level in Pakistan is much higher than that portrayed by the government.

This is primarily due to the criteria used for the measurements of labour force, employment and unemployment. Population census and periodic Labour Force Surveys are the major sources of data on labour supply, employment and unemployment in Pakistan. In addition, agricultural census also provides information on employment in the agriculture sector, the biggest employer of labour force, over 44 per cent or 15.98 million people in 1999. Many changes have been made to define the meaning of labour force and employment in Pakistan The Population Census of 1951 defined the labour force as all persons of 12 years and above were self-supporting, partially self-supporting or seeking work. In 1961, its definition was changed to include all those of ten years and above who were working for profit or wages or helping their family members. Not only the change lowered the age but it also included the unpaid family members in the employed. For instance, based on a population of 184.5 million today and a participation rate of 28.7 per cent, the total labour force in Pakistan comes to 38.6 million of which 36.2 million were employed. This also shows that only 2.4 million persons were unemployed in the country which reflected an affordable unemployment rate of 6.1 per cent. In fact, unemployment is a much more serious problem than the official statistics show. This also poses another relevant and worrying question. If the unemployment rate of 6.1 per cent is correct, the employment rate is an ideal 93.9 per cent. Those who know Pakistan, and there are many, find this highly unpalatable. Unemployment in Pakistan today is prevalent at all levels. It does not spare the highly qualified professionals any more be they doctors, engineers and MBAs. It hurts the illiterates, non-skilled, skilled, educated and professionals alike. However, it hurts the first two disadvantaged classes more than the others. While the weekend editions of major national dailies appear to be full of help-wanted advertisements they only tend to give a wrong picture of the unemployment situation.

Firstly, the majority of jobs advertised are aimed at the highly qualified professionals whose share in the total employment is just 3.6 per cent. There are little or no vacancies advertised for the two biggest occupational groups skilled agricultural and fishery workers whose share is 36.8 per cent and the elementary or unskilled workers whose share is 22.9 per cent. TABLE 1.2
Employed Work Force by Major Occupational Groups (2006) Group Legislators, senior officials and managers Professionals Technicians and Associate Professionals Clerks Service Workers and Shop and Market Sales Workers Skilled Agricultural and Fishery Workers Craft and Related Trade Workers Plant and Machine Operators and Assemblers Unskilled Total [Source: Economic Survey 2006-07] No. 3.1 m 1.3 m 1m 1.1 m 2.8 13.3m 3.6 m 1.7 m 8.3 m 36.2 m %age Share 8.6% 3.6% 2.8% 3% 7.7% 36.8% 9.9% 4.7% 22.9% 100%

In a country like Pakistan, where less than 1.4 per cent of the children, enrolled in primary school, manage to reach universities and professional colleges, the increased demand for professionals in the job market could hardly make any difference for the majority which drops out at all levels of the academic progress. The over emphasis on the maximization of the GDP has also led to uneven distribution of income in Pakistan. The data on income distribution, based on Household Income and Expenditure Surveys conducted by the Federal Bureau of Statistics during 1963 to 1994, shows at least four distinct phases of inequality at the ratios of the highest 20 per cent and the lowest 20 per cent income groups.

The first phase between 1963-71 shows that inequality in income distribution narrowed the ratio of highest to lowest 20 per cent income group decreased from 7.1 per cent in 1963-64 to 4.9 per cent in 1970-71. The second phase, from 1971-79 widened the income inequality from 5.4 per cent to 6.1 per cent. Once again, the ratio declined in the third phase, 1984-87 from 6.2 per cent to 5.5 per cent. In the fourth phase, 1987-93, the inequality in income distribution worsened as the ratio sharply rose by 2.3 per cent to 7.8 per cent. The inequality between the household income shares of the lowest 20 per cent and highest twenty per cent is obvious from the data collected by the Federal Bureau of Statistics from 1979 to 1993. In 1979, the lowest 20 per cent enjoyed a share of 8.3 per cent of the total income while that of the highest 20 per cent was 41.3 per cent. By 199293 the share of the highest 20 per cent increased by 7.6 per cent to 48.9 per cent while that of the lowest 20 per cent decreased by 2.2 per cent to 6.1 per cent. The middle 60 per cent share also declined from 47.6 per cent to 45.6 per cent during the same period. But the statistics also tend to give the false impression about the share of family income due to very basic flaw in the criteria for measurement of the labour force which includes all those over ten years seeking work during the year. The sharp decline in the household income shares of the lowest and the middle-income groups can be attributed to unemployment and under-employment.

1.3 CAUSES OF UNEMPLOYMENT IN PAKISTAN

There are various causes of unemployment in Pakistan. Factors like low level of investment, political instability, illiteracy, high rate of population growth, poverty, absence of technical knowledge, less opportunities of employment and many others are consideres as the main causes of increase in unemployment rate in pakistan. There are professionals who are still unemployed even they have got good education from prestigious institutions. The main causes of unemployment in Pakistan are explained in detail below:

1.3.1 POVERTY Poverty is considered as a root cause of unemployment in Pakistan. There are people who are living below the standard of living. As poverty rises, it causes rise in the unemployment. The average income of Pakistani is really low as compared to the income of the developing countries. Due to poverty, enough eduation or good level of education is not attained and this causes increase in unemployment when people do not have that education level which is required for a specific job. Poverty is considered as a main cause of unemployement in Pakistan. 1.3.2 ILLITERACY Illiteracy ia also considered as a main cause of unemployment in Pakistan. Here the absence of technical and educational level is also considered in the illiteracy. Most of the people are unemployed in Pakistan because they have lack of technical education and they do not know technical know how and they are not skilled enough to opt a job. There are a lot of unskilled laborers in Pakistan and that factor is considered in illiteracy. As the illiteracy increases the level of unemployment also increases. 1.3.3 POLITICAL INSTABILITY Political instability also causes unemployment in the country. A stable political system provides more opportunities to the people. Due to political instability there is sharp slowdown in growth of the large-scale manufacturing sector increases rate of unemployment. In Pakistan, political instability is a big problem because every new government that comes to rule the country make the new laws and policies regarding trade and industry which affects the previous process and due to such changes in the labor market there are variations in the unemployment rate. 1.3.4 INEQUALITY OF INCOME Income inequality is one of the important cause of unemployment. The greater the income inequality, the greater is the rate of unemployment. In developing countries,

where income inequality is present the rich are becoming rich day by day and poor are becoming poor day by day. In Pakistan, this factor exists and due to the existence of this factor the unemployment rate is increasing rapidly. The elite class is becoming rich and the poor class is becoming poorer.

1.3.5 FOREIGN DIRECT INVESTMENT Globalization and trade openness has led to FDI in developing countries. Because the world market is highly capitalized and competetive, FDI and multinationals are interested in keeping their costs low and product quality high. This is a fact that due to foreign direct investment there is a decline in unemployment. Therefore, in order to do so, they invest in developing countries and hire cheap labor in the form of children. The only disadvantage is that it increases child labor in the country. 1.3.6 LOW LEVEL OF INVESTMENT Due to poverty and unemployment, people have less income in hand, so due to this they save and invest less. Less investment and low level of saving also cause unemployment. People do not even know that investment and saving are in the favor of their country. This is due to lack of education among people. More investment means that there will be a decline in the unemployment rate of the country. But due to low level of investement the unemployment rate rises. 1.3.7 ABSENCE OF TECHNICAL EDUCATION Due to illiteracy, people do not know that how much technical education is important for them to acquire a good job. They kept on going with their conventional thinking. So as there will be absence of technical education, there will be a rise in the percentage of unemployment. Technical education and vocational training is very important to attain a good job. 1.3.8 LOCAL LABOR MARKET CONDITIONS

Mismatch in demand for and supply of labour in various sectors of the economy is also an important cause of unemployment. Where there is excess of labor supply, labor demand is required and vice versa. So unemployment rate increases because labor supply is not equal to the labor demand

1.3.9 HIGH RATE OF POPULATION GROWTH A very important cause of increase in the unemployment rate is the high rate of population growth. The population rate of Pakistan is growing day by day, and due to that much increase in the population rate there are less opportunities of employment. These less opportunities leads to an increase in the unemployment rate. The resources of Pakistan are less than as compared to the population, so unemployment rate increases rapidly. 1.3.10 NATURAL DISASTERS Natural disasters often become a cause of rise in unemployment. Due to the destruction caused by the natural disasters, thousands of employed people became unemployed and started seeking for some other jobs to earn income. So due to natural disasters the unemployment rate increases and it also destroys the stable economy of the country. 1.3.11 LOW TECHNOLOGICAL PROGRESS In a developing country like Pakistan, there is lack of latest and technological progress. Due to not that much advanced and latest machinery there is low technological progress in the economy. Due to low technological progress, there are less opportunities of employment. Low technological progress increases the unemployment rate. Low technological progress increases due to unskilled laborers who are not skilled enough to use the machinery.

1.3.12 LESS OPPORTUNITIES OF EMPLOYMENT In Pakistan, there are less opportunities of employment because the people have low incomes. Due to low level of incomes, they do not save and invest. As the level of investment and level of saving is low, that increases unemployment rate. When the level of investment is less that causes less opportunities of employment. In Pakistan, less opportunities of employment causes unemployment rate to increase. These are the variables that cause increase in the rate of unemployment. Some of the factors that have greater influence on the unemployment rate are described in detail in the further study.

CHAPTER 2 LITERATURE REVIEW

Numerous researches have been conducted on the main reason of unemployment and various factors that cause unemployment.. The research papers not only explains the major causes for the rising rate of unemployment in the country but as well as their effects on the society. It is very vast issue and the focus of the researchers was to obtain the main causes of rise in unemployment in Pakistan. Ayub M. (1994) wrote that applying the sociological and the primary causes of unemployment is individual as well as a social problem in a market economy. He further discussed that unemployment is caused by the society as well as by individuals. Even the economy or societal factors are not present unemployment can be caused by individual perception and their own subjective behavior. Poverty is the foremost cause of unemployment. It is one of the prime constraints and a case study has been provided by Shah A. (1998) on the natural disasters. Through this case study, he presented a major cause of unemployment in the country. Due to a flood in 1998, whole of the economy of the particular region was destroyed and millions of the employed people became unemployed. Weber M. (1999) wrote an article Measures of employment and unemployment, and stated that the measures of employment and unemployment may be "too high". In some countries, the availability of unemployment benefits can inflate statistics since they give an incentive to register as unemployed. People who do not really seek work may choose to declare themselves unemployed so as to get benefits; people with undeclared paid occupations may try to get unemployment benefits in addition to the money they earn

from their work. Conversely, the absence of any tangible benefit for registering as unemployed discourages people from registering Unemployment was highlighted as social issue by Waheed A. and Mujahid N (2000). They emphasized that illiteracy, poverty, and social and economic pressure are the main cause of the unemployment. They described unemployment as a socio-economic problem. The relationship of unemployment and labor market was analysed by Khan J (2001). They clarified with various examples that there is mismatch in demand for and supply of labor in various sectors of the economy. He claimed that mismatch in the labor market is due to the wrong policies of the government. The relationship between high rate of population and unemployment has been examined by Mangi N (2002). She described in detail the problems of having big family sizes and lack of resources as the main causes of unemployment. As the families are very big but there are lack of resources. So due to increase in population growth, there is lack of employment opportunities. Taft C. (2005) concluded that since not all unemployment may be "open" and counted by government agencies, official unemployment may be very low even under capitalism. Most poorer capitalist countries lack a modern welfare state and unemployment insurance so that it is very difficult to afford being unemployed for very long: they often end up taking jobs below their skill levels. Those who might be counted as "unemployed" in the rich countries end up instead being underemployed and not counted. A case study was provided on the migration of refugees as a cause of unemployment by Ahmed A (2003). He stated that the country already has the problem of less opportunities for employment and this migration of refugees increased the percentage of unemployment. Babar M. and Abbas A. argued the same issue same year. Their research aimed at the giving up behaviour of the people. They explained the fact that due to unsatisfactory jobs and insufficient incomes people are committing suicides and giving

up their lives. The researchers criticized on the government policies and took this issue as the major cause of unemployment in Pakistan. Hans F Sennholz (2004) author of Politics causes unemployment stated that chronic unemployment is obviously a political disease that springs from the primitive notion that government can improve everyone's income and working conditions by legislation and regulation. It is an affliction that stems from misinterpretation and misinformation about work and income and from an undaunted faith in collective force and coercion. It clearly reflects the spirit and mentality of our age. Unless they soon give way to the spirit of individual freedom and enterprise the rate of unemployment is likely to rise. It may even reach the levels of the old European welfare states, such as France, Germany, and Italy, where unemployment rates usually exceed 10 percent. In October 2004, Zada M. pinpointed the root cause to poverty, social instability, gender inequality, absence of vocational and technical training and deficient education system. The same year Ali U. highlighted the causes of unemployment. He took rise in population, lack of opportunities for employment, rise in corruption, poor credit facility, income inequality, and improper policies as the root causes of unemployment. The relationship between unemployment and low level of saving and investment was explored by Chahdhry R. (2005). The same year in March, Siddiqui S. brings to knowledge that how the unemployed labor force preferred unemployment in dreams of becoming millionaire within a night. Bhagwati J. (2005) went onto examine a broader and more detailed perspective of unemployment by encompassing all the ways it is defined to date. Less opportunities of employment was taken as the main cause of unemployment by Khan A. (2006). He explains that unemployment is a real issue and he explains the fact that as far as economy is growing, unemployment is also rising in the same way. The same year in November, Sulehri A. examined the relationship between unemployment

and foreign direct investment. He stated that increase in foreign investment would increase employment opportunities. Robert. S Andrew (2007) conducted a survey "Payroll Survey", based on a sample of 160,000 businesses and government agencies that represent 400,000 individual employers. This survey measures only nonagricultural, nonsupervisory employment; thus, it does not calculate an unemployment rate, and it differs from the ILO unemployment rate definition. These two sources have different classification criteria, and usually produce differing results. Additional data is also available from the government, such as the unemployment insurance weekly claims report available from the Office of Workforce Security, within the U.S. Department of Labor Employment & Training Administration. The latest research carried out in 2007 by Ali M. described that political instability is a cause of unemployment in the country. Due to unstable political system, lack of political wills, political decisions, security taxes, and labor laws unemployment increases.

CHAPTER 3 OBJECTIVE OF THE STUDY

3.1 PROBLEM STATEMENT To what extent high rate of population growth, illiteracy and low level of investment causes an increase in the rate of unemployment in Pakistan. 3.2 OBJECTIVE OF THE STUDY The objective of the study is to test the following hypothesis and see the relationships and impact of various variables on the unemployment rate in Pakistan. If illiteracy rate is high, the higher will be the rate of unemployment. There is a relationship between the investment growth rate and unemployment rate. The higher the rate of population growth, the higher the rate of unemployment.

3.3 TYPE OF INVESTIGATION The type of investigation undertaken in this research report is correlational and analytical study. It is carried out with the help of a statistical technique i.e. multiple regression as the objective is to investigate that how the various factors causes an increase in the unemployment rate in Pakistan.

Chapter 4 METHODOLOGY

4.1 SOURCE OF DATA Secondary data is used in this study for 17 years from 1990 till 2006 for both the countries. Data was taken from the Economic Survey of Pakistan for various years. 4.2 METHODOLOGY In order to achieve the above-mentioned objectives, secondary data for the independent variables (population growth rate, illiteracy rate and investment growth rate) and dependent variable (unemployment rate in Pakistan) from 1990-2006 is taken into consideration. Thus, time series analysis is undertaken. The computer software programme of SPSS (statistical package for social sciences) has been applied to run a multiple regression to analyze the dependence of population growth rate, illiteracy rate, and investment growth rate on unemployment rate in Pakistan. This secondary data for the economy of Pakistan has been collected for 17 years (1990 --- 2006). Hence, this research report deals with the time series data. 4.3 VARIABLE SELECTION CRITERIA Here, the variables that are taken into consideration are selected according to the objective; these all above-mentioned independent variables have the greater influence on the increase in unemployment rate in Pakistan and they can be easily quantified. There are also other variables which affect the unemployment rate and causes an increase in the unemployment rate as mentioned in the literature survey, but they cannot be quantified as reallocation of resources and due to lack of availability of the data. So the variables are selected which can be easily quantified. These factors causes increase in the rate of

unemployment in the country and their impact on unemployment can easily be seen in the further study.

4.4 THEORETICAL FRAMEWORK: Theoretical framework gives a diagrammatic representation of the relationship between the independent and the dependent variables. Dependent variable is the one whose value we are trying to predict and the independent variables are the ones who are used to predict the value of the dependent variable. There are various factors that cause increase in unemployment rate in the country. Through the employment rate, the economy of the country is concerned. Low rate of unemployment shows the growing rate of the economy in the country. The variables, which are selected to carry out the research, are now shown with help of a theoretical diagrammatic structure known as theoretical framework. The independent variables are on the right hand side while the rate of unemployment which is dependent on the factors mentioned is shown on left hand side.

THEORETICAL FRAMEWORK

Independent Variables

Dependent variable

Illiteracy Rate

Unemployment

Population Growth Rate

Investment Growth Rate

4.5 EXPLANATION OF THE THEORETICAL FRAMEWORK: As the population is growing day by day, it is causing less opportunities of labor which increases the rate of unemployment. High rate of population growth contributes much towards rise of unemployment that is taking country towards under developing side. In Pakistan, the literacy rate is less; due to this, the laborers or the people who seek for job do not get employment. In the absence of technical and vocational education, a large number of educated youth remains jobless and the unemployment rate increases. Higher the illiteracy rate, higher the unemployment rate. Increase in level of investment would increase employment opportunities. This will cause decline in unemployment rate. The higher the level of investment the lower will be the rate of unemployment because the higher investment level creates more job opportunities.

CHAPTER 5 DATA INTERPRETATION AND DISCUSSIONS

5.1 RUNNING A LINEAR MULTIPLE REGRESSION: Regression analysis investigates the dependence of the dependent variable on the independent variables and provides an equation to be used for estimating the value of the dependent variable from the known values of the independent variable. The following are the results that are obtained from this research: As mentioned earlier, the independent variables taken are illiteracy rate, population growth rate and investment growth rate while the dependent variable is unemployment rate. 5.2 REGRESSION ANALYSIS: To test whether our hypothesis is rejected or accepted we may need to run regression on the variables that we considered and explained in theoretical framework. Our hypothesis is: Ho: The three independent variable will not cause an increase in unemployment rate in Pakistan. H1: The three independent variable will cause an increase in unemployment rate in Pakistan. To test this hypothesis given above, multiple regression analysis has been done using SPSS software and coding techniques and results that we obtained are interpreted. To carry out this regression, values for all these variables were collected from 1990 to 2006 for the economy of Pakistan. By using the SPSS software programme, multiple linear regression has been used.

The following equation for regression analysis is given as: Y = a + b 1X 1 + b2 X2 + b3 X3 + e Where Y = Rate of unemployment in Pakistan X 1= Illiteracy rate in Pakistan. X2 = Population growth rate in Pakistan. X3 = Investment growth rate in Pakistan. a = intercept term b 1= regression coefficient with respect to illiteracy rate. b2 = regression coefficient with respect to population growth rate. b3= regression coefficient with respect to investment growth rate. e= stochastic error term Thus, the following results were obtained after running linear multiple regression: Table 5.1
b Variables Entered /Removed

Model 1

Variables Entered investment growth rate, iliiteracy rate, population a growth rate

Variables Removed

Method

Enter

a. All requested variables entered. b. Dependent Variable: unemployment rate

Enter method is used and the above table shows the independent variables which are entered to see that they cause increase in unemployment rate in Pakistan.

5.3 INTERPRETATION OF MULTIPLE REGRESSION RESULTS

In the model summary table given below, R is 0.867, which is the correlation of the three independent variables with the dependent variable, after all the Interco-relations among the three independent variables are taken into account. Table 5.2

b Model Summary

Model 1

R R Square .867a .752

Adjusted R Square .694

Std. Error of the Estimate .59929

R Square Change .752

F Change 13.118

a. Predictors: (Constant), investment growth rate, iliiteracy rate, population growth rate b. Dependent Variable: unemployment rate

R Square in this table of model summary is 0.752, which is actually the square of the multiple R (0.867) 2. R square is the coefficient of determination and it tells us the percentage of variation in the dependent variable, which is explained by the independent variables. In this model investment growth rate, illiteracy rate and population growth rate explains 75% of the factors that causes increase in unemployment rate. Also R Square being 75% shows that these three variables causes 75% increase in unemployment rate, there can be other variables that we have not considered that may have more variables that causes increase in unemployment rate therefore our R Square is 75%. The value of Durbin-Watson depicts the amount of autocorrelation present in our model. Auto correlation is defined as the correlation present between the error terms of a given model. If the value of Durbin-Watson lies between 1.5 and 2.5, it depicts minimal autocorrelation. In the model, the Durbin-Watson value is 1.672, which implies that there is no autocorrelation. Table5.3
b ANOVA

Model 1

Regression Residual Total

Sum of Squares 14.134 4.669 18.803

df 3 13 16

Mean Square 4.711 .359

F 13.118

Sig. .000a

a. Predictors: (Constant), investment growth rate, iliiteracy rate, population growth rate b. Dependent Variable: unemployment rate

The ANOVA table shows that the F value of 13.118 is significant at the 0.0001 level. In the df (Degree of freedom) in the same table, the first number represents the number of independent variables that are 3, the second number (13) is the total number of complete responses for all the variables in the equation (N), minus the number of independent variables (K) minus 1, (N- K- 1) = (17 3 1) = 13. The F statistic produced is significant at the 0.0001 level of significance. Thus, table shows that the overall model is significant at 100 % level of significance.

Table5.4
a Coefficients

Unstandardized Coefficients Model 1 (Constant) iliiteracy rate population growth rate investment growth rate B 87.702 .766 .300 -.039 Std. Error 27.050 .233 .108 .020

Standardized Coefficients Beta 4.764 4.051 -.297 t 3.242 3.282 2.773 -1.919 Sig. .006 .006 .016 .077

a. Dependent Variable: unemployment rate

This table shows that which among the three independent variables- illiteracy rate, investment growth rate and population growth rate influences most the variance. According to this table 1% increase in illiteracy rate will lead to 0.766 % increase in unemployment rate. If population growth rate is increased by 1% unemployment rate will increase by 0.300%. 1% increase in investment growth rate will lead to 0.039% decrease in unemployment rate By substituting the beta values in the regression equation the following results are obtained. = 87.702 + 0.766 X1 + 0.300 X2 0.039X3 Results mean that 75% of the increase in unemployment rate has been significantly explained by the three independent variables. Thus our hypothesis is sustained. Our overall significance of the model is also at 0.0001 level. This means that

we reject our null hypothesis Ho. We accept the alternatives hypothesis H 1: i.e. The three independent variable will significantly cause increase in unemployment rate in Pakistan. Thus, regression results have proved that there exists a relationship between unemployment rate and low level of investment, illiteracy rate and population growth rate.

CHAPTER 6 CONCLUSIONS AND RECOMMENDATIONS

6.1 CONCLUSION There are many factors that are responsible for the increase in unemployment rate in Pakistan but the findings of this research report show that illiteracy rate, investment growth rate and population growth rate are important variables influencing rate of unemployment in Pakistan. After running multiple linear regression using SPSS the findings show that in case of Pakistan the value of coefficient of determination R square is 0.752 showing that 75% variation is explained by unemployment rate due to illiteracy rate, investment growth rate and population growth rates. In Pakistan, correlation of unemployment rate with investment growth rate is negative showing an inverse relation. Correlation of unemployment rate with population and illiteracy rate is positively correlated. Although government of Pakistan is taking important steps to reduce the rate of unemployment but a large segment of population is living under the poverty line and is still unemployed. Unemployment is the biggest hindrance in the way of economic development. It is very important for Pakistan to identify the major variables that are responsible for the increase in rate of unemployment.

6.2 LIMITATIONS OF STUDY: There is lot of difficulty in getting reliable data in Pakistan because different sources provide different data. The sources available for data collection in Pakistan are very limited. Some of the variables are difficult to quantify as political instability, natural disasters etc, which are mentioned in the literature review of causes of unemployment in Pakistan and their statistical values are also inaccessible. The whole data has been collected from the Economic Survey of Pakistan. There were different values of the data in different sources and even there was variation in the values of Economic Survey of Pakistan.

6.3 RECOMMENDATIONS
Issue of unemployment is a multidimensional phenomena and it cannot be treated in isolation. There should be proper and proportional focus on all the sectors of the economy. Reduction in the rate of unemployment is one of the major goals for Pakistan. Although economic growth is very important for reduction in unemployment rate but growth without development did not play a very vital role. Economy of Pakistan is growing but is not developing. There should be more focus on the development components - basic standard of living, primary education, poverty reduction, health facilities etc. In order to cause a decline in unemployment rate employment promotion policies should be used, as a result the investment level will increase, incremental capital output ratio will reduce, efficiency level will increase and more employment opportunities will be created. This will have a strong impact on reduction of unemployment rate. Furthermore, policies should be made to ensure better access of the poor to financial resources, credit, markets, skills, information, and other means of livelihood.

Pakistan is a agrarian economy and major part of its population lives in the rural areas. In Pakistan rural unemployment is a bigger phenomenon. So, in order to alleviate employment there is a need for rural development. Policies must be adopted for increasing agricultural productivity and diversification by moving to market-determined agricultural prices, strengthening research and extension services, and expanding the role of private sector in storage and agricultural support services. Rural infrastructure should be expanded especially for roads, irrigation, and drainage and water resource conversion. New labor intensive techniques should be introduced. Easy Credit facilities should be given to the local farmers. They should be given proper incentive for their work new techniques of farming and more knowledge about seeds fertilizers and pesticides should be provided .Govt. must start such programs in which these facilities are given. Population growth rate has a very strong impact on the increase in unemployment rate. In order to reduce unemployment rate it is very important to control the growing population in Pakistan. Government must take steps in collaboration with private sector agencies and civil society including NGOs to carry out family planning programs. New health care clinics should be opened especially in the rural areas. Most importantly awareness campaigns should be carried out about the importance of family planning. There is a need for better manpower planning. The government must take important steps to increase the efficiency of labor. When labor is more productive, more income will be generated and it will contribute more to the economic development. Thus rate of unemployment will reduce. Employment creation is another useful measure for reduction in unemployment rate. The government must invest in the sectors that have greater potential to generate employment. In this context, the strategy called for rapid growth in agriculture, small and medium industries, housing and construction and the Information Technology sectors. In Pakistan there exist an increasing gap between rich and poor. Rich are becoming richer and poor are becoming poorer. The children of poor cannot study in

those school in which the children of rich people study. So there should be equal level of education for everyone. This factor will really help in reducing the level of unemployment in the country. The government should increase Public Sector Development Programme (PSDP) for the current fiscal year. Since the focus of PSDP has been on accelerating growth, increased funds for PSDP would mean enhancing public sector investment to generate employment thus raising overall growth. Skill Development Councils developed by Ministry of Labour Manpower and Overseas Pakistanis should identify needs of geographical area, prioritise them on market demand and facilitate the training of workers through training providers in public and private sectors. These councils should meet the diversified training needs of the industrial and commercial sectors and should train more laborers. Government of Pakistan should pay more attention on Ten Year Perceptive Development Plan for the period 2001-11. It has the major goals of accelerating GDP growth and reducing unemployment. This plan envisages to create 11.3 million new job opportunities so far through investment of Rs. 11287 billion during the Plan period. The government on its part must identify and promote sectors, which are considered not only to be the major drivers of growth but also have the greatest potential of creating more employment opportunities. In order to sustain this spectacular pace of growth and maintain healthy and vigorous macroeconomic indicators would require a prolonged period of macroeconomic stability, financial discipline, and consistent and transparent policies. These, along with improved governance and better quality infrastructure would encourage private sector to play a leading role in promoting investment and growth.

REFERENCES Ahmed A. (2003), Labor Mobility, Resource Allocation and Structural Unemployment. Economica, New Series. Vol. 53, No. 4. Arif G. (2000), Rural Non-Agricultural Employment and Poverty in Pakistan. The Pakistan Development Review, Volume 39, No. 14. Ayub M. (1994); An Inverted U-shape Relation between Rate of Unemployment and Level of Education: Some Evidences from Pakistan;Mumbai: Indian Economic Journal Bhagwati J. (2005); Education, Class Structure and Income Inequality; World Development: Volume 1, Number 5 Dennis J. (2004), Statistical Theories of Discrimination in Labor Market. Industrial and Labor Relations Review, Vol. 30, No. 2. Gazdar H. (1999), Causes of Unemployment in Pakistan: A Review, in S.R. Khan (eds.) Fifty Years of Pakistans Economy. Karachi: Oxford University Press. Gilani, I. et al. (1981), Labour Migration from Pakistan to the Middle East

and its Impact on the Domestic Economy. PIDE, Islamabad.

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Government of Pakistan, 2000: Pakistan Labour Force Survey- 2000; Islamabad: Federal Bureau of Statistics Government of Pakistan (2002), Pakistan Human Condition Report 2002. Centre for Research on Poverty Reduction and Income Distribution, Islamabad. Harris J. (1990), Migration, Unemployment and Development: A Two-Sector Analysis. The American Economic Review, Vol. 60, No. 1. Khan J. (2001), Urban Unemployment, Intersectoral Capital Mobility and Development Policy. Economica, New Series. Vol. 42, No. 165. Mangi N. (2002), Unemployment and Foreign Capital. Economica, New Series. Vol. 58, No. 229.

Micheal P.(2000), Economic Development, 7th edition. Addison Wesley. Morawetz D. (2004), Employment Implications of Industrialization in Developing Countries: A Survey. The Economic Journal, Vol. 84, No. 335. Mujahid N. (2000), Employment and Industrialization in Developing Countries. The Quarterly Journal of Economics. Vol. 80, No. 1. Nadiri I. (1995), Some Approaches to the Theory and Measurement of Total Factor Productivity: A Survey. Journal of Economic Literature, Vol. 8, No. 4. Osmani R. (2004).The employment nexus between growth and poverty: An Asian prospective. University of Ulster, U.K. Sarfraz K. (2001), Profile of Unemployment Rate in Pakistan , 1998-99. Pakistan Institute of Development Economics, Islamabad, (MIMAP Technical Report No. 2) Shah A. (1998). Poverty Facts and Stats, retrieved from www.altavista.com. on 5th March` 2008. Taft C. (2005); The Measurement of Institutional Characteristics of Nations;

Methodological Considerations; Journal of Development Studies; Volume VIII, Number 3. Waheed A. (2001), Urban Unemployment and Economic Growth. Oxford Economic Papers, New Series, Vol. 20, No. 2. World Bank (1994), Social Indicators of Development. Baltimore: Johns Hopkins University Press. World Bank (2001), World Development Report (2000-2001): Oxford University Press. World Bank (2003), World Development Indicators. Washington, DC: World Bank. Zaidi S.(2005). Issues in Pakistan`s Economy, Unemployment: Trends, Causes and Solutions, Second Edition, Ameena Saiyid, Karachi: Oxford University Press.

APPENDIX
Data Table No. 1 Original Values for all the independent and dependent variables for Pakistan.

Source: Economic Survey of Pakistan [2006-2007]

Years 1990-1991 1991-1992 1992-1993 1993-1994 1994-1995 1995-1996 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

Unemployment Rate (%) 6.22 5.85 4.73 4.84 5.41 5.40 6.10 6.10 6.10 6.00 6.00 7.80 7.80 8.30 7.70 7.60 6.50

Investment Rate (%) 22.76 26.89 14.80 14.78 13.87 15.98 9.67 10.87 5.89 14.65 9.60 4.65 12.46 15.98 32.84 32.70 21.40

Illiteracy Rate (%) 65.1 64.0 62.8 61.6 60.4 59.1 57.8 56.4 55.0 52.9 51.0 49.5 48.4 47.0 47.0 46.0 45.9

Population Rate (millions) 110.79 113.61 116.47 119.39 122.36 124.50 127.50 130.60 133.50 136.70 139.40 142.90 145.30 149.00 151.10 154.00 156.80

Data Table No: 2 No. of Employed in comparative LFS (Million)

Source: Labour Force Survey 2003-04 Year 1990-91 1991-92 1992-93 1993-94 1994-95 1996-97 1997-98 1999-00 2001-02 2003-04 Pakistan 29.14 30.19 31.06 31.83 31.96 34.75 36.44 36.72 38.88 41.75 Rural 20.66 21.82 22.38 23.42 23.34 24.24 25.50 26.08 26.66 28.64 Urban 8.48 8.37 8.68 8.41 8.62 10.51 10.94 10.64 12.22 13.11