Nearly 60 per cent of the youth in the age group of 15 to 24 years in Pakistan is idle, unemployed, not studying, not in training and is not looking for jobs, according to a World Bank Development Report. The report used the data from the survey conducted in 2010.

The youth unemployment ratio is at seven per cent compared to the overall unemployment rate of projected five per cent.. Even those who work, do so in unpaid jobs. If paid, they are less likely to have access to social security.

Two main aspects of the job scenario stand out. First, self-employment stands at 23.1 per cent, making measures of unemployment and underemployment inadequate. Unpaid family workers also make calculation of unemployment ratio further controversial.

Second, the coexistence of traditional and modern modes of production leads to large variations in the nature of work, from subsistence agriculture and menial work to technology-driven manufacturing and services. For example, employment in farming is still 39.8 per cent, the highest of all segments of the economy.

Contrary to this, wage-employment is at 37.1 per cent. So the bulk of people are in non-wage employment — self-employment and farming.

The challenge of this demographic transition will be to keep the ratio of employment to working-age population constant which is currently, at 55 per cent.

The participation rate in the labour force is also projected at 55.2 per cent. However, gender and age differences are striking.

About 28 per cent of women, but more than 82 per cent of men participate in the labour force, whereas participation rates are above 75 per cent for both men and women in Tanzania and Vietnam.

Beyond these stark contrasts in participation, women continue to earn significantly less than men, and the differences are not fully explained by education, experience, or sector of work. Similarly, the share of women in wage-employment is much lower of total employment amongst women.

World Bank Country Director for Pakistan Rachid Benmessaoud said over 80 per cent of women cited household duties as one of the reasons for their non-participation in the labour force. Lack of education was another reason for their non-participation, the World Bank director said.

Women spend more money on education, health of children as compared to male members of the family. This has a positive impact on development.

The report also pointed out some job challenges like skills redundancies with the changing demands of the economy. Skill mismatches are arguably growing rather than shrinking. Up to one-third of the workers employed in countries as diverse as Brazil, Costa Rica, Pakistan, Sri Lanka, and Tanzania are either under or over-qualified for the work they do. Skill shortages are a serious constraint for the most dynamic entrepreneurs.

The government will have to target the areas, activities, or firms with greater potential for job creation. The Reko Diq mining (gold, copper) project will create 2,500 jobs during the construction phase but once the mine will be in operation, employment will go down to only 200. However, the share of investment on the venture is projected at four per cent of GDP.

The World Bank report identifies three bottlenecks in creation of jobs. On the demand side, shortage of electricity, governance and political instability are top three constraints. While on the supply side, there was skills mismatch, malnutrition and low female participation in economic activities. The creation of jobs, according to a World Bank official, is primarily a collective responsibility of the government ministries.

However, the report suggests a greater role of the private sector in the creation of jobs for the growing number of youth in the years ahead.

The report also refers to poverty reduction through jobs particularly in rural areas. The growing commercialisation of agriculture and an increase in cash crop production in Uganda and Pakistan contributed substantially to poverty reduction.

The increase in price of cash crops, improvement in land rights, better access to input and output markets, and investments in infrastructure affect the labour productivity of farmers, but originates in land or food markets rather than labour markets.

The report advances a three-stage approach to help governments meet these objectives: First, solid economic fundamentals — including macroeconomic stability, an enabling business environment, human capital and the rule of law — have to be in place.

Second, labour policies should not become an obstacle to job creation, and should also provide access to voice and social protection of the most vulnerable. Third, governments should identify which jobs would do the most for development given their specific country context and remove or offset obstacles to the private sector’s creation of such jobs.

Policymakers have to look at various options, whether to build strategies around growth or focus on jobs, or engineer employment-oriented economic development.