Causes of Unemployment in Pakistan

Abstract

Unemployment refers to an economic condition in which individuals actively seeking jobs remain un-hired. In other words, unemployment is defined as a state in which an individual is willing to perform a job but not having one. Unemployment entails individuals with the ability to work, a resolve to find employment, available and in the hunt for employment. Unemployment is a problem which is experienced throughout the world in both developing and developed countries. After the recent global economic crisis in 2008, situation of employment has become worse and unemployment is considered as a major threat for social development and global economic well-being. In accordance to the estimates of International Labor Organization (ILO), more than 212 million men and women have been officially counted as unemployed in 2009. Whereas, billions of people around the world are either working on low wage jobs or underemployed. The numbers have significantly increased in last decade or so, as more than 300 million people have been officially counted as unemployed in 2019. Unemployment is caused as a result of various aspects, as numerous factors contribute to this global key concern including rising cost, lack of skills or education, rapid technological change, increased population, etc. Unemployment is further divided into various categories including hidden, cyclical, frictional, structural, and classical unemployment. Hidden employment is defined as the unemployment of prospective workers as a result of errors made while generation of statistics over unemployment. Whereas, cyclical unemployment is defined as the state in which claims within an economy fails in offering jobs to those who are willing to have one. As a result of reduced manufacturing due to limited claims (demand) for products and services, fewer workers are required causing cyclical unemployment. However, frictional unemployment is defined as the changeover phase between jobs. Meanwhile, structural unemployment is defined as the state in which individuals not having the jobs tend to fail in meeting the requirements of available jobs in terms of skills needed. Finally, classical unemployment is defined as the state in which earnings that an individual receives for his/her job go beyond ordinary levels resulting in limited job vacancies for the many unemployed people