Population of Pakistan: An Analysis of NSER 2010-11 Youth and Employment Participation Government of Pakistan -BISP- - Dignity, Empowerment, Meaning of Life to the most vulnerable through the most scientific poverty database, targeted products and seamless service delivery nationwide. © Benazir Income Support Programme Material in this publication may be freely quoted or re-printed, but acknowledgement is requested, together with a copy of the publication containing the quotation or reprint Researcher: Dr. Shujaat Farooq Disclaimer: The views expressed in this publication are those of the author and do not necessarily represent the views of Benazir Income Support Programme (BISP) and UNICEF. Youth and Employment Participation Youth and Employment Participation 1 Youth and Employment Participation 2 Youth and Employment Participation Table of Contents 1 Introduction…………………………………………………………………………………… 05 2 Methods to Measure Labour Force Participation in Pakistan…………………………... 07 3 The Measurement of Labour Force Indicator in Pakistan: A Comparison of NSER with Other National Data Sources………………………………………………….. 09 4 Employment Participation Rates in Pakistan……………………………………………… 11 5 Youth Employment Participation by Sector……………………………………………….. 15 6 Youth Employment Participation and Socio-Demographic Profile……………………... 17 7 Youth Unemployment in Pakistan………………………………………………………….. 23 8 Conclusions and Policy Recommendations……………………………………………... 27 Appendix figures and tables………………………………………………………………. 29 References…………………………………………………………………………………... 55 3 Youth and Employment Participation List of Tables 1 Comparison of Employment Questions of Census 1998, LFS 2010, PSLM 2010 and NSER 2010-2011…………………………………………………………. 09 2 Share of Youth in Population by Gender and Province/Region: BISP, LFS and PSLM Datasets……………………………………………………………………. 11 3 Proportion of Working Youth and Adult by Gender and Province: BISP and LFS Datasets…………………………………………………………………...… 12 4 Age-Specific Employment Rate by Gender: BISP and LFS Datasets………...………..14 5 Proportion of Youth and adult in Various Employment Categories by Gender—BISP Dataset………………………………………………………..………… 15 6 Changes in Employment Status- A Comparison of BISP and Census 1998………..… 16 7 Attained Education and Type of Employment of Youth-NSER 2010-2011………...….. 17 8 Employment Type of Youth by Education of Head of Household-NSER 2010-2011… 19 9 Employment Type of Youth by Employment Type of Head of Household-NSER 2010-2011…………………………………………………………………………………….. 20 10 Employment Type of Youth by Dependency Burden-NSER 2010-2011………………. 20 11 Unemployment Rate by Gender: BISP, LFS and Census 1998 Datasets………..…… 24 12 Estimated Youth Unemployment Rate by Gender and Province: NSER 2010-2011.... 24 13 Age-wise Estimated Unemployment Rate by Gender in Pakistan: BISP and Census 1998…………………………………………………………………………………………… 25 List of Figures 1 Proportion of Working Youth and Adult by Gender in Various Regions-NSER 2010- 2011…………………………………………………………………………………..……….. 12 2 Gender-Wise Age Specific Employment Rate in Pakistan--NSER 2010-2011……...… 13 3 Age-Specific Employment Rate: BISP, PSLM and LFS Datasets ……………………… 13 4 Male Employment Rate and Enrolment Rate for Youth………………………………….. 18 5 Female Employment Rate and Enrolment Rate for Youth………………………………. 18 6 Paid Employment and Poverty rates for Youth…………………………………………… 21 7 Paid Employment and Mean PMT for Youth……………………………………………… 22 8 Mean PMT and Unemployment Rate for Youth………………………………………….. 25 9 Poverty (%) and Unemployment Rate for Youth…………………………….…………… 26 4 Youth and Employment Participation 1. Introduction The volume and age-structure of population are important factors in determining the significance of labour force and economic growth of a country. Like other countries, population composition overtime has changed in Pakistan with rising share of youth and working age population. The on-going demographic transition in Pakistan has resulted in a significant rise in youth population. Pakistani youth constitutes about one-fifth of total population and more than one-third of the working-age population. It is an immense economic and human resource if it can be utilised properly as Pakistan has been experiencing once-in-a-lifetime demographic dividend in which share of working age population particularly youth is rising [Nayab (2008)]. Youth is a valuable human resource of every country and considered as an important asset for nation`s development. There are about 1.2 billion young people of age 15 to 24 and comprise around 24.7 percent of the world’s working-age population. About 87 percent of them live in developing countries (ILO, 2009). In Pakistan youth constitutes a major share of working age population as around more than one-fourth of the employed labour force comprises of youth (ages 15-24 years). It represents an important segment of the population both for economic development as well as from the perspective of labour force. This significant proportion of young population is human resource which can be utilised efficiently if proper economic opportunities are given to them. However, youth labour force participation is still low in Pakistan compared to the other South Asian countries both for men and women having higher gender gap as compared to the other countries of the region [ILO (2008)]. Youth in Pakistan face number of challenges in their way to work, early start to work, failing to enter the labour market and difficulties in moving across the jobs. Besides, lack of education, skill and experience are some of major issues of youth in the labour market. In comparison to other age-groups, Pakistani youth is facing more challenges to perform in labour market including; high unemployment, rising job search periods, high risk of vulnerability, wage penalties and lower level of job satisfaction [Arif and Chaudhry (2008); Pakistan (2011); Farooq (2011, 2012)]. Some research evidences suggest that Pakistani youth is facing strong structural obstacles and economic distress for searching decent work. Their share of paid employment in total employment in Pakistan is low, and a high share of youth particularly young females are likely to work as unpaid family workers. Moreover, youth also face challenges in paid employment and their significant proportion is absorbed in low skilled jobs in Pakistan [Spareboom and Shahnaz (2007)]. The aim of present study is to analyse the youth (age 18-29) employment participation at district level by using 2010 NSER 2010-2011 and make a comparison with other national datasets; PSLM, LFS and Census 1998. There being limited number of labour force related questions in NSER 2010-2011, it is beyond the scope to observe economically active population, industrial structure, occupational distribution, earnings and quality of work. The study has focused on the following three dimensions; 5 Youth and Employment Participation Gender-wise analysis of youth and adult employment participation in Pakistan by comparison of NSER 2010-2011 with other national datasets; Gender-wise analysis of employment participation by category of employment and linking it with youth socio-demographic profile; and Gender-wise estimation of potential unemployment of youth on the basis of NSER 2010-2011. The rest of the study is organised as follows. Section 2 presents a historic review of census and labour force surveys about the measurement of labour force participation followed by a comparison of labour indicators given in 2010 NSER 2010-2011 and in other national datasets in Section 3. The results about the employment participation rates and by sector have been discussed in Sections 4 and 5 while the results about their linkages with the youth socio-demographic characteristics are presented in Section 6. The penultimate section discusses the unemployment rates. Conclusions and policy considerations are given in the final section. 6 Youth and Employment Participation 2. Methods to Measure Labour Force Participation in Pakistan The economically active population consists of persons available for work of either sex who provide labour services for the production of goods and services as defined by the United Nation System of National Accounts, during the reference period. Those who are not looking for jobs i.e. women involved in domestic activities, retired persons, and students are considered the inactive part of population. It reflects that the economically active population is the sub-group of working age population who is either employed or seeking employment. The potential size of labour force participation depends on both the quantity and quality of labour; however, latter is usually not considered in developing countries. The accurate estimation of labour force participation of a country depends on various indicators including; working hours, size of labour force, seasonal employment, education/skill level and health status of workers [Standing (1978); Cameron and Irfan (1991)]. In Pakistan, two ways have been adopted to measure economically active population which is the current status and usual status. The former follows the short reference period i.e. availability of work during last one week or one month while the later follows the long reference period i.e. one year. Historically, the census has followed the usual status approach while the LFS and PSLM follow current status: in LFS, reference period is last one week while in PSLM it is one month. Usual status face the difficulty that irregular, seasonal and unpaid family workers can be excluded from the