Employment
Chapter
19
Employment
Generation of productive employment with decent working conditions on a sustainable
basis to absorb fast growing labor force has always remained one of the avowedly
pursued objectives of our economic policy. The magnitude, nature and structure of
unemployment are major concerns of the planners and policy makers in the country.
Prudent economic policies like properly developed human resources and their effective
utilization have generated a number of productive employment opportunities in the
country. However, unemployment rate has marginally increased in 2009-10 due to low
economic growth in recent years.
Policy
The policy framework of the plan is based on Economic Growth Framework recently
formulated by the Planning Commission focusing on employment expansion and
employment activation polices to absorb the growing labor force especially youth to
reap the benefit of demographic transition. Employment expansion policies are helpful
for generating demand for labor while employment activation policies are main source
of improving the supply of labor force.
Strategy

Employment expansion strategy is based on sustainable growth through
increasing productivity, supporting innovative entrepreneurship, private sector
development, increasing energy generation to meet demand, youth
entrepreneurship, gender equality, connectivity, developing the cities as
engine of growth, promoting small scale industries, and empowering youth and
community.

Employment activation strategy emphasizes the improvement of labor skills
endowment in general, paying particular attention to identifying specific skill
gaps and taking effective steps to fill them. National Vocational Technical
Education Commission (NAVTEC) would help to improve the standard of
technical education in the country. Skill Development Councils would help to
meet the diversified training needs of the industrial and commercial sectors of
their geographical areas.
Review of Labor Market
Table 19.1 presents a comparison of the trends in labor participation rates,
unemployment rates and employment status of labor force in the last two years. Labor
force participation rate has marginally increased from 32.8% in 2008-09 to 33% in
2009-10 by 0.2 percentage points. Female participation rate has increased from 14.9%
in 2008-09 to 15.5% in 2009-10; implying female participation in economic activities is
increasing. Unemployment has slightly increased from 5.5% in 2008-09 to 5.6% in
2009-10 due to low economic growth. Female unemployment rate is 9.5% while male
is 4.4%.
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Employment
Share of self-employment and employers has increased while share of unpaid family
helpers and employees has decreased in overall employment during 2008-09 and
2009-10.
Table 19.1: Employment Status, Participation and Unemployment Rate
(%)
2008-09
2009-10
Participation Rate
32.8
33.0
Male
49.6
49.5
Female
14.9
15.5
Unemployment Rate
5.5
5.6
Males
4.5
4.4
9
9.5
1.2
1.3
Self Employment
33.3
34.2
Unpaid Family Helper
29.7
29.1
Employees
35.8
35.4
Females
Employment Status
Employers
Source: Labor Force Survey, relevant issues, Federal Bureau of Statistics
Current Employment Scenario
On the basis of estimated population of 177.1 million (1st July 2011) and the labor force
participation rate of 33 % as per the latest Labor Force Survey 2009-10, the labor force
is estimated at 58.4 million. Of the total labor force, males constitute 45.1 million (77%)
whereas females are 13.3 million (23%). Of the total labor force, 55.2 million are
employed while remaining 3.2 million persons, who constitute 5.6% of the labor force,
are unemployed. Out of total unemployed persons, males are 2 million (61%) while
females are 1.2 million (39%).
Of the total employed workforce, the majority i.e. 45% is employed in agriculture
sector, 13.2% in manufacturing sector, 6.7% in construction, 15.2% in wholesale &
retail trade, 5.2% in transport/storage & communication and 11.2% in the community
and social services sector. As far as the employment status is concerned, 1.3% are
employers, while self employed, unpaid family helpers and employees are 34.2%,
29.1% and 35.4% respectively.
Women Employment
Females’ population constitutes 48.6% (LFS 2009-10) of total population but their
share in labor market is not in proportion to their share in total population. Only
13.3 million (23%) females are in the labor force as compared to 45.1 million (77%)
males in the total labor force. In terms of employment only 12 million (21.8%)
females are employed as compared to 42.2 million (78.2%) males. Total
unemployed labor force is 3.2 million, while unemployed females are 1.2 million
which constitute 39% of total unemployed labor force. Female unemployment rate is
9.5%.
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Employment
Youth Employment
According to available labor statistics, youth population is estimated at 36.2 million and
16.2 million are in category of labor force. Out of total youth labor force, 14.9 million
are employed while remaining 1.3 million unemployed implying 8.4% youth
unemployment rate which is higher than the national average, 5.6%.
Unemployment among the youth has not only a social dimension but also shows
wastage of trained and young population of the country. The Government is cognizant
of the youth unemployment situation and has taken a number of steps to contain it.
Government is trying to invest in education and vocational training for employability of
youth and numbers of projects are being implemented in the field of education and
vocational training. Government also believes in equal opportunities for young women
and men and trying to eliminate discrimination if any. National Internship Program is a
special program for youth and it provides financial relief as well as work experience to
facilitate youth employability. Small and Medium Enterprise Development Authority
(SMEDA) is presently facilitating the youth for starting and running the enterprise.
Youth entrepreneurship training policy under Economic Growth Framework is being
formulated to facilitate their employability.
Employment Projection (2011-12)
Labor force growth, based on projected average population growth and some increase
in the labor force participation rate, is estimated at 3%, implying approximately 1.75
million new jobs would be demanded in next financial years. As employment elasticity
is 0.5, approximately 6% GDP growth is to be required to absorb the growing labor
force and to maintain the unemployment level of 2010-11, 5.6%. Our economy is
projected to grow by 4.2% in 2011-12 which is less than required growth rate of the
economy to absorb the growing labor force and maintain the same level of
unemployment. Hence, prudent policy initiatives are required to generate additional
employment and maintain the unemployment rate at the level of 2010-11.
One policy initiative may be to facilitate private sector for economic growth as well as
employment generation. Provision of demand driven vocational training along with
credit policy for self employment is also considered as prudent policy initiative for
employment generation. Continuation of National Internship Program (NIP) would be
helpful in decreasing the pressure from the labor market. Boosting of overseas
employment would also be helpful to reduce the pressure on domestic job market. The
employment elasticity is expected to improve by focusing on sectors, having high labor
intensity, such as construction, small and cottage industry as well as personal and
commercial services. Youth entrepreneurship training would be helpful in decreasing
pressure on labor market in the country.
Employment Promotion Policies
The policy focus of government is on creation of decent employment opportunities and
human resource development. The importance of the fact can be gauged by the
initiatives taken by the government such as National Internship Program, President’s
Rozgar Program; credit for self employment by National Bank of Pakistan (NBP),
enhancement of residential facilities by construction of one million housing units,
doubling of lady health workers to cover Kachi Abadis, raising of minimum wage from
Rs 6,000 to Rs 7,000 and pension of workers, establishment of National Vocational and
Technical Education Commission (NAVTEC), and restoration of Trade Unions. These
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Employment
steps are helpful in employment generation and human resource development. The
specific policies and programs are as follows:
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Sectoral Development
Investing in Water Resources
Development Program and Employment Generation
Micro Credit Facilities through SME Bank
Micro Credit Facilities through Khushhali Bank
President’s Rozgar Scheme by National Bank of Pakistan (NBP)
Information Technology
Overseas Employment
National Internship Program (NIP)
NAVTEC Skill Development Program
Skill Development Councils
Skill Development
Skill development efforts of the government are separately presented in chapter 7
under Part-II “Enhancing Productivity” of the Annual Plan.
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