Monthly Archives: October 2014

Trend of Employed Youth in various industries in Pakistan

Image Source: ILO

Image Source: ILO

Youth is the energetic segment of the society which has ability to contribute to the economic growth at best. Data from the Labor Force Survey showed that the youth population aged between 15 to 29 years has been considerably increased, and hence the youth labor force. The statistics of the employed youth in various industries is as follows:

Although agriculture is considered to be the back bone of economy but mere 37.85% youth were employed in the agriculture industry during 2001-2002,  18.54% youth aged between 15-29 years are employed in manufacturing industry where as 43.61% youth are employed in services sector during the same year.

On the other hand statistics showed that during the year 2012-13, more of the youth have been involved in agriculture sector than before. 40.65% youth have been employed in agriculture industry. Manufacturing industry employees 17.95% youth whereas services employees 41.40% youth.

The percentage change of employed youth during 2001-02 and 2012-13 in the various industries showed that the employed youth have been increased in agriculture industry by 2.8%, in manufacturing it has been decreased by 0.59% where as the percentage change in services sector is decreased by 2.21%.

It shows that the services sector in Pakistan is not much contributing to provide employment opportunities for the youth. For that reason it is essential to flourish services sector. Technical and vocational trainings and skills development programs must be enhanced so that more of the youth can be employed keeping in view the worsening situation of the youth labor market. Additionally if the youth is getting more engaged in the agriculture sector, then modern technology as well as essential resources including credit, and training must be provided to the youth.

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Numbers matter

Pakistan’s young population has grown at a breathtaking pace in the past decade. According to Pakistan Labour Force Survey, the population of citizens aged 15-24 years increased from 28.14 million to 37.4 million during the period 2002-2013.

The gender disaggregation of the 37.4 million youth in 2012-13 shows that 19.35 million are males (51.67%) and 18.1 millions are female(48.33%).

In terms of labour force participation, 43.6 percent of the 37.4 million youth were economically active in 2012-13, while 56.4 percent were out of the labour force and about 8.1 percent are unemployed.

The education profile of the employed youth reveals that 36.74 percent of them do not have any formal education, whereas 55.15 percent studied below intermediate level. Astonishingly, this makes a total of 91.15 percent of the employed youth with education level below intermediate.

Youth with education above intermediate and up to Masters and M.Phil degrees ranging in subjects including engineering, medicine, agriculture, social sciences, natural sciences and all others, comprise of a mere 8.1 percent of the employed youth.

Employed Youth

The analysis of their employment status reveals that the majority of them   (around 57 percent) are working as unpaid family helpers followed by paid employees (42.68 percent), while only 0.23 percent of youth are independent employers.

 Among the 14.5 million employed youth, 43.41 percent are employed in agriculture, forestry and fishing sector, which is followed by the manufacturing sector at 18.2 percent and wholesale & retail trade sector employees 14.77 percent.

Real estate sector employs the lowest proportion of youth at just 0.08 percent of total youth employment.  The remaining 23.56 percent are employed in other sectors including, social work activities, information and communication, and financial and insurance companies.

An analysis of employed youth with technical or vocational training reveals that over 84 percent of the 14.5 million employed youth have not received any kind of vocational or technical training such as auto or engine mechanics, carpentry, tying, computer or tailoring etc.

Amongst the 15.7 percent employed youth with technical or vocational training, 9.44 percent have taken off-job training; whereas 6.2 percent of the youth have taken on-job training.

In total, 2.2 million youth have taken some form of vocational trainings. A majority of the youth have taken training in tailoring and sewing at 28 percent, while 14.3 percent youth choose to take driving trainings.  The remaining 2.2 million employed youth have received other forms of training, including repair of machineries, arm repairs, drillings, garment making and live stock etc.

Earnings

The analysis of monthly earnings of paid employed youth by education level highlights an alarming situation in the youth labour market. It is observed that youth with no formal education have an average monthly earning of Rs. 7,016.2, while those with pre-primary level of education, on average earn Rs. 7,202 per month.  Young people with education above primary level and below middle level earn Rs. 7,472.8 per month, while employed youth with education achievement above middle but below matric earn Rs. 8,284.2.

Moving up to matric level, the average monthly earnings comes out at Rs. 8,448.5. This comparison illustrates that the difference between earnings of the youth with no formal education and those with matric mounts to just Rs. 1,432.4, highlighting the low returns of education up to the matriculation level.

Those with professional degrees earn, on average Rs. 13,359.5 per month, while for MA/MPhil degree holders, the mean earnings rises to Rs.18, 034.8.

The Unemployed

The unemployment rate of youth for the year 2012-13 is 10.54 percent. The educational profile of unemployed youth reveals that 17.07 percent have no formal education, while 39.21 percent have education up to middle level.

Another 21.47 percent of the unemployed youth have education up to matric but below intermediate level, and 11 percent have attained education up to intermediate but below degree level – while only 3.1 percent of unemployed youth have M.A/M.Sc, M.Phil/PhD degrees. A total of 0.19 million unemployed youth have received some form of technical/vocational training, whereas 1.5 million of their unemployed counterparts have never taken any vocational or technical training in life.  The high share of economically inactive youth is an alarming sign for future growth and development prospects of the country.  A substantial majority of the out of labour force youth is female, representing 78.9 percent of all inactive youth in 2012-13. Both the cases reveal that the impact of gender discrimination is higher in labour market in case of Pakistan.

This large mass of youth does not contribute to the economic prosperity of the country willingly. For this bulk of youth awareness is essential in order to minimize the cost which the society bears as a whole.

The above analysis of youth labour market prospects highlights a number of challenges; including majority of the youth being employed in low skill jobs, low educational attainment of employed youth, high unemployment among educated youth, and low earnings gap among educated and illiterate youth.  Most importantly almost half of the out of labour force youth is not enrolled in education.

Recommendations

The government’s response to the emerging issue is worth mentioning. After the 18th Constitutional Amendment in 2010, the subject of youth was devolved into provinces.

Department of youth affairs in each province is attempting to encourage improvement in youth’s skills and capacities. However, a focused and holistic approach is yet to be developed and implemented, which would directly impact the high rates of youth unemployment.

In some provinces like Baluchistan, the department of youth affairs is not operational yet, while in all other provinces these departments are focusing more on promotion of sports, arranging seminars, and promoting youth organizations; instead of taking any tangible measures.

On the other hand, the Prime Minister’s youth schemes including laptop schemes, skill development schemes, and loan schemes have not shown any positive effects on the current market situation of youth unemployment.

Additionally, government’s attempts as suggested in the annual plans include the promotion and establishment of the National Vocational and Technical Training Commissions, Youth Development Centers, (YDCs), e-learning centers for youth, youth internship programs, IT labs and Danish Schools do not seem to have made much of a difference on the ground level to address youth labour market vulnerabilities.

Traditional attempts have not been very successful in improving the market situation of youth labour force, with youth being exposed to worsening economic circumstances.

In order to adequately address youth labour market challenges, the government should take an evidence based approach, on the basis of which scarce public resources are allocated to the most efficient programs and projects having the highest impact.

The government should stick to the 4Cs rule: Commitment, Consistent, Continuity, and Courage. It should take holistic approach and practice long steps forward to ensure decent employment opportunities for youth.

As a result the dynamic population can contribute to the prosperity of economy and society with their skill and potential which would certainly assist to accomplish economic stability.

This article was published earlier at The News International.

http://magazine.thenews.com.pk/mag/moneymatter_detail.asp?id=9107&magId=10&catId=82#sthash.sDxTrcGu.dpuf

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