QUESTIONS

1. Select a Multiple regression equation with two explanatory variables (one quantitative and the other qualitative). 2. Obtain time series or cross sectional data or 2! observations rom "a#istan economic survey (2!11$12) and present it on excel sheet. %. &sing O'S( estimate the regression line. ). *nterpret the coe icients o regression and test their signi icance.

INTRODUCTION
Employment rate is very much depend upon the labor force participation rate is there is increase in the working age population in the country but they are not participating as a labor force so the employment cannot increase in the economy. +he labor orce participation rate is a measure o the proportion o a country,s wor#ing$age population that engages actively in the labor mar#et( either by wor#ing or loo#ing or wor#- it provides an indication o the relative si.e o the supply o labor available to engage in the production o goods and services. +he brea#down o the labor orce by sex and age group gives a pro ile o the distribution o the economically active population within a country .When the labor force participation in the economy increases it lead to increase in the employment. +he "a#istani emale education( emale labor participation and health care continue to interval behind men in most o the ields o li e. /omen who comprise almost hal o the population are enormously vulnerable( especially in developing countries. "a#istani women li#e in many developing countries insulate behind men because o social( cultural and traditional norms. 'ow literacy rate high birth rate( poor health( low li e anticipation and non$ recognition o their wor# within the amily are some o the common personality o women in "a#istan as well as in other developing countries. Employment rate is also effected by the male and female participation rate beside the quantitative variable we also have qualitative variable that is gender which further involve male and female participation rate. Now by collecting data from the economic survey of Pakistan we will estimate these variables by using OL .

VARIABLES UNDER CONSIDERATION

0ependent variable 1mployment the total number o people gain ully employed or wor#ing *ndependent variables 'abor orce participation rate 2+otal number o people who are employed or loo#ing or a 3ob in the country 4ender2 Male and emale participation

VARIABLES SELECTION CRITERIA

5ere( the variables that are ta#en into consideration are selected according to the ob3ectivethese both independent variables have the greater in luence on the increase in employment rate in "a#istan and they can be easily handled +here are also other variables which a ect the employment rate and causes an increase in the employment rate. So the variables are selected which can be easily quanti ied. +hese actors causes increase in the rate o employment in the country and their impact on employment can easily be seen in the

METHODOLOGY
Type of Investig tion 6 causal analysis has been underta#en in order to observe the impact o labor orce participation on employment D t Type Secondary data has been used or 2! years covering the period o 177%$2!12. 0ata is mainly ta#en rom 1conomic survey o "a#istan Running a multiple regression !egression analysis investigates the dependence of the dependent variable on the independent variables and provides an equation to be used for estimating the value of the dependent variable from the known values of the independent variable. Regression analysis "o test whether our hypothesis is re#ected or accepted we may need to run regression on the variables that we considered. Our hypothesis is$

%o$ "he independent variable will not cause an increase in employment rate in Pakistan. %&$ "he independent variable will cause an increase in employment rate in Pakistan. +o test this hypothesis given above( multiple regression analysis has been done and results that we obtained are interpreted. +o carry out this regression( values or all these variables were collected rom 177% to 2!12 or the economy o "a#istan.

MODEL
Model is linear we used O'S technique to ind regression results Y' & + ( x2 i + ) Di "he variables are defined as follow Y8 employment in millions !" 8 intercept term !# 8 regression coe icient with respect to labor orce participation !$ 8 regression coe icient with respect to gender %# ' labor force participation rate in percentage D ' * for female workers in &++),(**( and & for male workers in (**),(*&(

Calculations
x2( = X2(
( (

( X2 )( n

!"#$%&'%

( -*(.). )( (*

(%&$)

( X3 )( x3 = X3 n
x ( y = X ( Y y2 (= Y2(

( )./.0 )( (*

( X ( Y ) ( -*(.). ) ( 1.&.-& ) =(/-(*.+( =(0..& n (*

%(('!&*#

( Y2 )( n

( 1.&.-& )( (*

!#)(&$)

x ) y= X )Y

( X ) Y ) ( .11.*+ ) ( 1.&.-& ) =&..1-.0 = -*.)/ n (* ( X ( X )) ( -*(.). ) ( )./.0 ) =&*)...+( = &-./( n (*

x ( x ) = X ( X )

ui (= yi ( ( yix ( i ) yix ) i =&(/-.*/ ..(* ( (0..&/ ) *.-. ( -*.)/ )=-).*=

(

ui ( -).*= =).(* n) &0

 x) ( x ( y ) ( x )() ( x ) y ) ( x ( x )) (=
(=

( (0..&/ ) ( &-1.*) ) ( -*.)/ )( &-./( ) ( &-1.*) ) ( -).*/ ) ( &-./( )(

*&#$

x) ( x ) y ) ( x (( ) ( x ( y ) ( x ( x ) ) )= )=

( -*.)/ ) ( -).*/ ) ( (0..&/ ) ( &-./( ) ( &-1.*) ) ( -).*/ ) ( &-./( )(

( X( ) X)

0().1+*/ &*)(&.)1

$&(*

& =Y

& =.(.*1 ( ..(* ) ( )*.&& ) ( *.-. ) ( &0.(+ )

1..0

Stan+ar+ errors an+ t,e -ariances.

-ar & = / Se
&

& X (( x )( + X )( x (( ( X ( X ) x ( x ) ( + ( n x (( x )( ( x ( x ) ) & &-110./) & + ).0* = + -.*/ =-.& (* &*)(&.)1 (* 0

var &

-.&

#&%1

-ar ( =

x )( ( ( ( ( x ( x ) ( x ( x )) -(&.0& &*)(&.)1 $&$($

Se

( = 0

var (
(

*.*-*

$&!(

-ar ) =

x( ( ( ( ( x ( x ) ( x ( x )) ()).(1/ &*)(&.)1 $&$##($

Se

) = 0

var )

*.*((-*

$&!%

RESULTS AND INTER&RETATIONS +o analy.e the impact o employment on 1conomic growth o "a#istan Ordinary 'east Square estimation technique has been applied or the period 177%$2!12 Y & + ( ( labour force participationrate )+ ) ( gender )

1..0 + ..(* x ( i + *.-.2&

6s the regression result shows( ).2! is the partial regression coe icient o the labor orce participation tell us that by holding the in luence o the other actors constant as labor orce participation increases by 19 on average the employment increases by ).2! million. +he benchmar# category :1 represents average participation o emale during the period 177% to 2!!2 is about ;).<9. =y contrast the di erential slope coe icient 01 shows that average participation o male during the period 2!!% to 2!12 is higher by about !.>)9( or an actual average participation( ;?.%)9. 2Y3OT2ESIS TESTIN4

T Ratios&
H $ &=*
H&$ &*

& & e &

! =*.*/

1..0 * = .&./& (.*. nf'(*

3ritical region. tcal t = H i re"ected .&./&4 (.&&* On the basis of the data we may re#ect the significance *.*/ .
H $ (=* H so it is statistically significant at the level of

H&$ (* ( ( e ( ! =*.*/ 3ritical region. tcal t = Hi re"ected &0.1(4 (.&&* ..)-0 * =&0.1 ( *.(./ nf'&0

On the basis of the data we may re#ect the significance *.*/ .

H $ )=*

H so it is statistically significant at the level of

H&$ )* ) ) t e ) ! =*.*/ 3ritical region.

*.-( * =*..-*.&/ nf'&0

tcal t = Hi re"ected ..0+4 (.&&* On the basis of the data we may accept the significance *.*/ H so it is statistically significant at the level of

5 Ratio&
H $ (= ) =*

H&$ ( )*

# n$ ( &# $& ! =*.*/

& &0 % = -(.)* & *.+/ ( nf'&0

3ritical region. 5' &! ( $ &6 n $ )= Hi re"ected -(.)* 4 )./+ 7f we have to test the overall significance or #oint hypothesis testing we will use 5 test6 o we can say that on the basis of data we may re#ect the H as 5 &! significance ! =*.*/ CONCLUSION "here are many factors that are responsible for the increase in employment rate in Pakistan but the findings of this research report show that labor participation rate and male and female participation are important variables influencing rate of employment in Pakistan. 8fter running multiple linear regression the findings show that in case of Pakistan the results showed that labor force participation rate has significant impact on employment male participation is more than female participation dummy variables are assigned in order to get results from male and female so all the

' -(.)*4 )./+ at the level of

are statistically significant.

participation rate 8lthough 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. 9nemployment is the biggest hindrance in the way of economic development. 7t is very important for Pakistan to identify the ma#or variables that are responsible for the increase in rate of unemployment. "o encourage the female participation more steps should be taken females capture a large sagment of population so along with men they should also be encouraged. LIMITATIONS O' STUDY( ) +here is lot o di iculty in getting reliable data in "a#istan because di erent sources provide di erent data. +he sources available or data collection in "a#istan are very limited. +he whole data has been collected rom the @1conomic Survey o "a#istan,. +here were di erent values o the data in di erent sources and even there was variation in the values o A1conomic Survey o "a#istanB.

Re6erences
:aidi .;(**/<. 7ssues in Pakistan=s Economy6 9nemployment$ "rends6 3auses and olutions6 econd Edition6 8meena aiyid6 >arachi$ O?ford 9niversity Press. @overnment of Pakistan6 (*&&$ APakistan Labour 5orce urvey, (***BC 7slamabad$ 5ederal Dureau of tatistics Econometrics by @u#rati /th edition Economic survey of Pakistan (**&,(**(Ech&Egrowth and stabiliFation.