Causes and Consequences of Unemployment in Pakistan

Causes and Consequences of Unemployment in Pakistan:

Unemployment is the most challenging issue in Pakistan. The problem lies around the globe as a most challenging issue. Moreover, the causes and consequences of unemployment in Pakistan can be found in the country’s educational system which provides fewer skills and technical exposure. The other major cause is the lack of investment due to the uncertain environment contributed by terrorism, discrimination, sectarianism absence of a merit system, and so on. Pakistan has less industrial growth among the developing countries because of the less collection of taxes, shortage of energy, trained labor, and the policy gap by the government.

INTRODUCTION:

Unemployment has become the most challenging problem globally. Unemployment can be defined as a person who can do work and is willing to do it but can’t find a job opportunity to earn. In Pakistan, the unemployment ratio is increasing rapidly and it’s now become the biggest issue that every youth is facing. Many top universities in Pakistan produce a lot of young graduates but they are failing to get a better jobs. Currently, more than 300,000 people are unemployed in Pakistan, and by ratio is 12%. One of the biggest reasons behind unemployment is overpopulation. The population is increasing day by day but the resources are limited that’s why the unemployment ratio is increasing with it too. There are many reasons for overpopulation; lack of family planning education, lack of women empowerment, preference to have more sons and many other reasons are exist.

In Pakistan, we see the educational system as substandard, parents give their own direction to choose the field of study instead of asking about their children’s interests which results in a structural mismatch and wrong guidelines There’s also a culture of nepotism and political interference. Many intelligent and highly skilled students can’t get jobs just because they don’t have any references so they failed. On the other hand, those people who are illiterate because of poverty and poverty is because they are not employed. That’s why they can’t fulfill their basic needs. Industries play an important role in any county to overcome unemployment rates and economic crises. But due to a lack of industries, many people can’t find opportunities. World is becoming challenging day by day, candidates are increasing but opportunities are fewer. The lack of industries, lack of big projects, and lack of funds are critical issues in Pakistan. 

Literature Review:

1- Maqbool, Mahmood, Sattar, and Bhalli (2013) in their article titled “Determinants of Unemployment Empirical Evidence from Pakistan” said that unemployment is a stage in which individuals actively work to find or search for jobs and they mentally prepare themselves to work at any level of wage which already exists in the competitive market world. They said the unemployment rate in South Asian Countries is very high due to a lack of absorption capacity, and underutilization of resources basically resources of the country are not properly utilized in these under-develop or developing countries. High population or over-population is another main reason for unemployment for example. These generate social-economic problems. 

2- According to Aqil, Qureshi, Ahmed, and Qadeer (2014) in their article named “Determinants of Unemployment in Pakistan” said that unemployment is the main important issue or problem in macroeconomics. It creates many social and economic problems. They examined the factors that affect employment levels in Pakistan. They gave 4 important independent variables chosen as determinants that affect unemployment which are Gross Domestic Product (GDP) growth rate, inflation, population growth rate, and Foreign Direct investment (FDI). They said unemployment is when people are willing and able to do work but cannot find their desired job. Unemployment is not a good, positive, or healthy sign from the country's social and economic point of view. It causes many crimes, political instability, corruption, and poverty, and negatively affects the country's GDP and economy.

Hypothesis on Causes & Consequences of Unemployment in Pakistan:

1)- Hypothesis related to causes:

a) Is Unemployment one of the major reasons which makes Pakistan an underdeveloped country?

b) Is the failure of the educational system the only factor leading to unemployment?

c) Is unemployment totally independent of other factors and exists by itself?

d) Does a weak economy lead to an increase in the percentage of unemployment?

e) Is the government not responsible for increasing the ratio of unemployment?

f) Does increasing population add to the increasing unemployment rate?

g) Industries owners having their own interests are promoting unemployment by giving less pay to labor?

h) Are rural areas more exposed to unemployment?

i) Low GDP growth and economic pressure are increasing unemployment in the country?

j) Do only illiterate people play their part in unemployment?

2)- Hypothesis related to Consequences:

a) Being the weak economy of Pakistan can cause unemployment?

b) Do illiterate people also face the drawbacks of unemployment?

c) Can control of the population may eradicate unemployment?

d) By correcting the educational system, unemployment can be cut out completely?

e) Taking debts from foreign banks and states will create employment opportunities in Pakistan?

Conclusion :

The objective of this study is to explore the determinants of unemployment and there consequences in Pakistan. The study examines the relationship among the population, foreign direct investment, gross domestic product, inflation, external debt, and unemployment. It is hypothesized that these factors exert a strong impact on unemployment in the economy of Pakistan and which results in poverty people not being able to fulfill their basic needs. Though also educated people are not getting a job because of a corrupt system based on references or bribes rather than doing selection on merit or sometimes they lack the skills required to fulfill the requirements of a job because of the standard of education. But things can be done right if it's still not too late. Pakistan Just has to work on little things and the first thing is to correct the system Pakistan will definitely progress and will cope with all its deficiencies.