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Strengthening of labour force needed

Strengthening of labour force needed

The Experts in the world investigated that in developing countries, labour markets play a central role in determining economic and social progress since employment status is one of the chief determinants of exiting poverty. Ultimately, having a decent, well-paid and secure job is the most sustainable path to increasing incomes and consumption levels. However, the reality in the formal economy of most developing countries is that the labour market fails to create the jobs needed to assist individuals and their families prosper. Rather, the labour markets tend to be characterized through the persistence of informality in urban regions, the continuing share of workers in subsistence agriculture, low pay and poor working situations, along with the disparities women, youth and other specific segments of society face. Despite better economic growth in various countries over recent decades, these challenges remain as pressing for governments across the world. Furthermore, the segmentation in the labour markets of developing countries continues to persist in both rural and urban regions. In Pakistan, as per the statistics released through the economic survey of Pakistan FY2022, the country is 5th most populous country globally. According to the National Institute of Population Studies (NIPS), the estimated population of Pakistan is 224.78 million in 2021 of which 82.83 million reside in urban regions, whereas 141.96 million live in rural regions and the population density is 282 per Km2. Pakistan has a large labour force that stands among the top 10 largest labour forces in the world. The Government of Pakistan recorded that the the labour force grew from 65.5 million in FY2018 to 71.76 million in FY2021 and the number of employed persons grew from 61.71 million to 67.25 million during the same period. The unemployment rate slightly fell from 6.9 percent in FY2019 to 6.3 percent in FY2021. This shows that 4.51 million people from labour force could not get job in FY2021. According to the Labour Force Survey (LFS) FY2021, overall employment to population ratio is 42.1 percent and this ratio is higher in male (64.1 percent) as compared to female (19.4 percent). In Punjab employment to population ratio is 44.2 percent, followed by Sindh (42.1 percent), Balochistan (38.6 percent) and KP (36 percent), respectively. According to the Labour Force Survey FY2021, the share of employment in agriculture sector decreased from 39.2 percent in 2018-19 to 37.4 percent in FY 2021. This sector is the main source of supply of raw material to the other sectors of the economy, mainly industrial sector. It is said that the significant share of employment from agriculture sector is shifted to industry and services sector due to technological transformation. The services sector is the largest growing sector of the economy and the share of employment in services sector is 37.2 percent in FY2021. Statistics analyzed that share of employment in construction sector has grown from 8.0 percent in FY2019 to 9.5 percent in FY2021. This increase shows that job opportunities are being created in Pakistan. Wholesale and retail trade sector has shown 14.4 percent employment in FY2021. The employment level in transport/storage & communication remained same in the period under review and share of employment in community/social & personal service sectors grew from 14.9 percent in FY2019 to 16.0 percent in 2021. Furthermore, the overall unemployment rate is 6.3 percent with prevalence of higher unemployment rate 12.2 percent among 20-24 years as against with 11.8 percent in FY2019. Youth unemployment rate is quite high as compared to the average unemployment rate. Improvement in infrastructure and skill development programmes can play an important role to create employment opportunities in Pakistan. To generate sufficient employment opportunities for such a large labour force is a huge challenge in Pakistan. In addition to this, skills gap makes it tough for individuals to find jobs and for employers to find appropriate trained workers for their industries. Skills development enhances both people’s capacities to work and their opportunities at work, offering more scope for creativity and satisfaction at work in our country. In Pakistan, skills development can play a key role in the alleviation of poverty.

In pursuance of Goal 8 of Sustainable Development Goals (SDGs), i.e. Decent Work and Economic Growth, the government of Pakistan has developed a broader roadmap for youth development under National Skill Strategy (NSS) which emphasizes on enhancing governance, exploring multi-source funding, capacity enhancement by employable skills, quality assurance, access and equity, industry ownership and skill development for international market for growing foreign remittances. The emphasis is also made on re-skilling the existing workers through Recognition of Prior Learning (RPL) and provision of subsidized loan to unemployed youth. Further, the introduction of Competency Based Training and Assessment (CBT&A) is an important element of the National Skills Strategy (NSS), which is the basis of the ongoing Technical and Vocational Education and Training (TVET) sector reform in Pakistan.


No doubt, the human resource of a country plays a vital role not only in the economic development but also for the social well-being of the people. However, proper management of human resource can boost economic performance and reduce social distress in Pakistan. The future prosperity of a country depends ultimately on the number of persons in employment and how productive they are at work.

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