Unemployment & Poverty

Poverty Ratio in Pakistan

As of 2023, poverty is expected to reach 37.2 percent ($3.65 /day 2017ppp). The rate is slightly below the last observed measure in 2018, which stood at 39.8 percent; however, when accounting for population growth, there are almost 3 million more poor people in the country than in 2018.

Factors Responsible for Poverty
Difficult macroeconomic environment,
Deteriorating labor market,
Lower remittances,
Inflation: Quickly rising prices,
The impact of recent Natural disasters have led to a decline in household incomes
Labour Market : Labor market wages remain the main income source for households.

Poverty Reasons

Structurally low labor force participation rate manufacturing sector is weak and small.
The scarcity of highly productive (and formal) jobs.
Informality is prevalent, and over 40 percent of the employed population works in agricultural jobs with low productivity.
Gender inequalities in the labor market are also persistent. Only 1 out of 4 working-age women participate in the labor force and almost 80 percent work in agriculture.
While inequality, measured by the Gini index has remained relatively stable at around 29.6, the last decade's economic growth has not Helped to close deep spatial disparities. Rural poverty rates double urban ones and are consistently higher across all provinces.

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Employment Generation

Unemployment refers to the share of the labor force that is without work but available for and seeking employment. According to ilo.org:
The number of person’s unemployed— not working and actively seeking work—is projected to reach 5.6 million (as an upper bound) in 2023, an increase of 1.5 million unemployed persons since 2021.

This estimate matches to the IMF projected unemployment rate in 2023 of 8.5 per cent, up from 6.2 per cent in 2021.

The female unemployment rate, which is historically at least 1.5 times that of male rates, could reach a high of 11.1 per cent .

Large investments is necessary to reduce the gaps in educational attainment and provide access to safe sanitation, improved drinking water, and electricity.

There are small gaps in access to services provided at the household level, such as electricity and improved drinking water.

Gender inequality inside households remain. For example, 36 percent of school-age girls are not attending school, which is 11 percentage points higher than for boys, a situation with long-term ramifications for inequality and access to opportunities.

Non-monetary dimensions of poverty are expected to have worsened as a consequence of the ongoing economic crisis and natural disasters.

Unemployment effecting health

With declining incomes, people have less access to nutritional food, which undermines human development outcomes.

Moreover, floods have disrupted access to sanitation, improved drinking water, schools, health centers, and markets, likely leading to increased hardship, a worsening of health outcomes, and increased stunting rates among the affected population.

Multidimensional Poverty Index (MPI) 2016

Report says: national poverty rates falling from 55 % to 39% from 2004 to 2015.
Measure uses Rather than income and wealth alone, the MPI uses broader measures to determine poverty based on access to healthcare, education and the overall standard of living, thus giving a more detailed understanding of poverty.
Finding of Report:
Rural poverty very high The report states 38.8% of Pakistan’s population lives in poverty. A majority of the rural population (54.6%) lives in acute poverty while this ratio is only 9.4% in urban areas.