Causes of Unemployment in Pakistan

Pakistan has one of the highest unemployment rates in the world. Unemployment in Pakistan is very different from other developing countries that have high rates of unemployment. People in developing countries generally want to work, but they are not able to find jobs. The unemployment rate in Pakistan is around 26%, compared to an average unemployment rate of around 8% in South Asia.

Unemployment is as persistent as it is widespread. The reasons for unemployment are numerous, but some of the most common ones are geographical location, educational levels, and political instability. In most developing nations, the unemployment rate is much higher than in developed countries.

Here are some causes of unemployment in Pakistan

Foreign Remittances: 

Although there are many causes of unemployment, a few issues have now become more relevant. One of the major causes of unemployment in Pakistan is low overseas remittances. This is money that is sent by expatriates to their families back home. This is done mainly by family members and friends, not by employers. The People’s Bank of Pakistan has recently announced a commitment to improving the remittance system and has decided to start a foreign worker remittance scheme.

Education System:

Low-skilled people have no choice but to remain unemployed. The major reason for this is a shortage of qualified manpower in the country. This is because most people are not getting enough education and also lack awareness about job opportunities in the country. There is a huge jump in the unemployment rate every year as more and more educated people are joining the labor market, but there is a shortage of jobs for them.

Economic System:

Pakistan has a huge population but the economy of this country is at a state of collapse. The things that were once normal now are beyond the means of most Pakistanis. Many people have lost their jobs and many more have yet to find one. Without jobs many of our youth are forced to move back to their parents’ homes in an attempt to stay out of poverty. The government knows that the economic situation is dire and it has been looking for quick ways to boost the economy but so far, nothing has worked. Pakistani leaders have been working hard at finding solutions to this problem however no one has come up with a real solution that will help Pakistan grow into a stable, prosperous country.

Taxation System:

High taxation is one of the main causes of unemployment in Pakistan. Most of the revenue that is collected by the government is absorbed by the government. The government’s purpose is to collect taxes, but this purpose is a result of their own ignorance and mismanagement. In order to know what taxes are being collected and how much it has been collected, it is required that the government should have a record of this data.

Energy Crises:

The major concern of the world is the shortage of energy due to which big industries are destroyed, unemployment is a very big problem. Pakistani are forced to feed the load of coal power plants, which resulted in a gas shortage, electricity failures and a rise in unemployment.

Effects of unemployment

The effects of unemployment are many and varied, but can be broadly categorized as income-related or non-income-related.

  • Income-related effects include a lack of income which can lead to poverty; debt and bankruptcy; hunger, malnourishment, and homelessness.
  • Non-income related effects include increased mortality rates due to the lack of access to healthcare; increased rates of depression, violence, and crime; increased dependence on welfare programs.

How to overcome Unemployment?

One possible remedy to unemployment is a universal basic income. This would be an unconditional monthly stipend, paid by the government to all adult citizens, regardless of their employment status or any other personal circumstances. These payments could come from a combination of federal and local tax revenues, and may also include contributions from employers.

A universal basic income would provide a guaranteed minimum level of economic security for families who are struggling financially. It would reduce poverty and inequality while making work pay better. It should be introduced gradually, so that people have time to adjust their lifestyles if they choose to do so. They should also be given the opportunity to contribute more if they want.


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