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Labour force on the decline: women participation taking lead

The Government of Pakistan has mentioned that labor force participation rate is predicted on the basis of Crude Activity Rate (CAR) and the Refined Activity Rate (RAR). The government’s statistics also show that labor force participation rate has slightly declined from 32.9 percent during FY2012-2013 to 32.3 percent in FY2014-2015. Statistics also showed that female labor force participation rate rose from 15.6 percent in FY2012-2013 to 15.8 percent in FY2014-2015 and the male labor force participation rate declined from 49.3 percent in 2012-13 to 48.1 percent in 2014 15.

The government adepts also mentioned that women in the workforce can be a major driver of the economic growth. This growing participation of women in paid work explains the sincere and committed attempts by the government to decline the gender gap in labor force participation rate. It also shows that women are getting better job opportunities of obtaining technical and professional education and therefore getting more jobs. As agriculture is treated as a family occupation in rural regions, therefore, the female labor force participation in rural regions is higher as against to urban regions. Statistics also revealed that the labor force participation rates for male and female by age group are very significant and helpful. It is significant that children between the age group of 10-14 are also participating in the labor market, but this participation rate has declined from 11.4 percent in FY2013 to 9.6 percent in FY2015.

Labor force participation rate of 15 to 19 age groups has declined from 35.8 percent in 2012-13 to 33.5 percent in 2014-15. In the age group of 20-24 the labor force participation rate has also declined from 53.1 percent to 52.6 percent in the same period. The reduction in the labor force participation rate in early age groups reflects that the education opportunities are growing. While labor force activity among older workers (55 to 59 years) has risen from 62.5 percent in FY2013 to 63.8 percent in FY2015.

Unemployment rate in Pakistan
Fiscal Year%

In Pakistan, male labor force participation rate is touching to 100 percent in some age groups, whereas, female labor force participation rate is still lower than 32 percent in all groups. The government’s experts also mention in the annual report of the economy that agriculture sector plays a vital role also it is also the main source of employment and 42 percent of labor force is engaged directly or indirectly with agriculture.

At the same time this sector is the key source of supply of raw material to the other sectors of the economy particularly industrial sector. With the development of technology transformation, the labor is being replaced by machines, thus limiting working opportunities in agricultural sector and this coupled with natural calamities in the form of droughts and floods have led reduction in the income levels and decline in its employment.

The share of employment in agriculture is shifted to industry and services sector. The share of employment in agriculture has presently declined from 43.7 percent in FY2013 to 42.3 percent in FY2015 and in industry sector this ratio has slightly increased from 22.4 percent in FY2013 to 22.6 percent in FY2015.


Furthermore, the government of Pakistan also mentioned that the services sector is the largest growing sector of Pakistan and the share of employment in services sector is growing as against to other sectors. The employment ratio has risen from 33.9 percent from FY2012-13 to 35.1 percent in FY2014-15 as this sector offer career opportunities which are diverse in nature such as unskilled, semi-skilled, skilled and high skilled which includes doctors, engineers, advocates, builders and financial consultants.

The manufacturing sector can also play a significant role in generating income in formal and informal sector. The share of employment in manufacturing sector has risen from 14.1 percent in 2012-13 to 15.3 percent in FY2014-15. This increase explains that career opportunities are being created in Pakistan and it is also the indication of economic development. The wholesale and retail trade sector has explained the optimistic growth as numbers of employed people in this sector are also growing. During FY2015 it absorbed 14.6 percent of total labor force. The employment level in transport/storage & communication and community/social & personal service sectors employ 13.2 percent and 5.4 percent workforce, respectively in FY2014-15.

Experts also mentioned that the informal sector plays a significant role in developing states such as our country and it can be categorized as self employed workers and wage workers, doing different jobs from traders to small producers. The huge informal sector exists side by side with formal sector in the country and approximately 72.6 percent non agricultural labor force is earning its livelihood through this sector. They also said that the growth rate of workers in the formal sector (3.78 percent) is higher as against to informal sector growth rate (-1.35 percent).

The workers in formal sector have risen from 26.4 percent during FY2013 to 27.4 percent in 2015. The rise in formal sector is because of highly paid wages. The share of workers have declined from 73.6 percent in FY2012-13 to 72.6 percent in FY2014-15. In the informal sector because of the causes that citizens are getting better wages in the formal sector. The government’s statistics revealed that the employment ratio in rural informal sector has declined from 77.4 percent in FY2012-13 to 76.1 percent in FY2014-15 while male workers ratio in formal sector has risen from 22.6 percent to 24.3 percent in the corresponding period. In the informal sector the share of female workers is higher as compared to male workers in rural areas. The ratio of workers in formal sector of urban regions has risen from 30.1 percent during FY2012-13 to 30.8 percent in FY2014-15.

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