LAHORE: The unemployment rate in Pakistan has risen to 8.5 per cent in 2014-15 contrary to the reported rate of below 6pc, the highest in the last 13 years.

The unemployment rate among female and young workers is also relatively high. There is little difference in the unemployment rate between urban and rural areas of the country.

“The reported unemployment rate is just under 6pc which apparently has fallen slightly from the level in 2012-13. However, if appropriate adjustment is made the unemployment rate rises to 8.5pc in 2014-15,” states a fact sheet issued by the Institute of Policy Reforms about employment situation on Wednesday.

IPR says ‘idle’ young males are 1m, joblessness grows in agri sector

It says an extremely worrying feature of the current unemployment situation is that the rate among literate workers is more than twice that of illiterate ones. In fact, the highest rate of unemployment, three times above the national average, is observed in the case of ‘highly educated’ workers with either degree or postgraduate qualifications.

Similarly, after 2012-13 the unemployment rate has improved the most in Khyber Pakhtunkhwa. However, employment growth has been the fastest in Punjab.

The IPR refers to the Pakistan Bureau of Statistics which has recently released the findings of the latest Labour Force Survey of 2014-15. Thirty-three such surveys have been carried out by PBS. The coverage is nationwide. The sample size was 42,108 households in the 2014-15 survey. Information is provided on the level and characteristics of the labour force and employment, the level of unemployment, the number of hours worked, the occupational distribution and wages.

About developments in the labour market of Pakistan, the fact sheet says between 2012-13 and 2014-15, only 1.3 million workers apparently entered the labour market. Historically, the number entering the market used to be 1.5m workers per annum. Therefore, given the conditions in the labour market, almost 1.7m potential workers have either opted not to join the labour force or there has been a major understatement of the labour force size by PBS.

Between 2012-15 the number of jobs created was 1.4m. Accordingly, the decrease in the number of unemployed workers was 100,000. As such, by the end of 2014-15, the number of unemployed workers was 3.6m. However, if the number of discouraged workers is included and the normal increase in labour force allowed for, the total number of the unemployed rises to 5.3m.

The fact sheet says employment has fallen somewhat in agriculture while almost two-thirds of new jobs created during the last two years have been in the manufacturing sector. Only one-third of the additional jobs are in the services sectors, which largely fall in the informal economy. The prospect of finding `decent work` is much higher in the formal sector. Currently, about 27pc of the workers are engaged in the formal sector.

IPR says an important development is the trend towards increased labour force participation rate of women in Pakistan which is currently one of the lowest in the world. It has risen significantly after 2008-09 by almost three percentage points, to reach 22pc. Meanwhile, the labour force participation rate for males has actually fallen by 1.5 percentage points.

While discussing the trend in real wages IPR revealed that between 2008-09 and 2014-15, real wages have increased for technicians and professionals, while that for unskilled workers have fallen.

There are over one million `idle` young males aged between 15 and 29 years who are more vulnerable to crime or militancy. These individuals are neither undergoing education nor searching for a job. The youth employment programmes launched by the government have also not been so successful in inducing productive engagement in the labour force.

The IPR adds that a significant positive trend is the decline in the number of child workers by over 14pc, has witnessed since 2012-13. Focus on this problem has increased following the granting of GSP plus status to Pakistan by the EU and conditional adherence to 27 international conventions.

The fact sheet concludes that for a sustainable unemployment-reducing situation to develop, the growth rate of the GDP will have to rise to over 6pc. Simultaneously, the state and the private sector will both have to invest more in improving the skill endowment of the labour force.

Published in Dawn, January 28th, 2016