Title page
Contents
ABBREVIATIONS 5
FOREWORD 8
EXECUTIVE SUMMARY 9
POLICIES TO STRENGTHEN THE FUNDAMENTALS OF JOB CREATION 10
POLICIES TO BOOST PRODUCTIVITY 11
POLICIES TO PROMOTE THE INCLUSIVENESS OF THE LABOR MARKET 11
INTRODUCTION 13
1. MACRO DRIVERS, TRANSFORMATIONS, AND JOBS 17
1.1. GROWTH, POVERTY REDUCTION, AND JOB CREATION IN PAKISTAN 18
1.2. EXTERNAL FACTORS AFFECTING GROWTH AND JOB OUTCOMES 20
2. KEY LABOR MARKET OUTCOMES 24
2.1. LABOR MARKET TRENDS OVER TIME 24
2.2. LABOR MARKET SNAPSHOT IN 2017 26
2.3. ACCESS TO QUALITY JOBS 31
3. PAKISTAN'S WORKFORCE 36
3.1. EDUCATION AND SKILLS 36
3.2. EDUCATION, COGNITIVE AND NONCOGNITIVE SKILLS, AND LABOR MARKET RETURNS 39
4. PAKISTAN'S ENTERPRISES 42
4.1. BUSINESS ENVIRONMENT FOR ENTERPRISES 43
4.2. NONFARM, NONAGRICULTURAL HOUSEHOLD ENTERPRISES 44
4.3. DIGITAL JOBS IN PAKISTAN 50
5. URBANIZATION AND INTERNAL MIGRATION FOR JOBS 53
5.1. URBANIZATION IN PAKISTAN 53
5.2. INTERNAL MIGRATION AND LABOR MARKET IMPLICATIONS 54
6. OVERSEAS LABOR MARKET 58
6.1. TRENDS IN OUTMIGRATION FROM PAKISTAN 58
6.2. A MIGRANT'S JOURNEY 60
7. CONCLUSIONS AND POLICY DIRECTION 66
7.1. BRIEF SUMMARY OF MAIN FINDINGS 66
7.2. INITIAL POLICY DIRECTION 68
REFERENCES 74
APPENDIX A: SUMMARY OF BACKGROUND PAPERS AND DATA SOURCES USED 80
APPENDIX B: REGRESSION ANALYSIS OF EMPLOYMENT OUTCOMES 81
APPENDIX C: POLICY AND INSTITUTIONAL ANALYSIS OF INTERNATIONAL MIGRATION IN PAKISTAN 82
Table 1. Summary of Key Data Sources Used in the Jobs Diagnostic 15
Table 2. Prevalence of migration into the four provinces in Pakistan within the past 10 years 55
Figure 1. Population by five-year age group in 2017 17
Figure 2. Population by five-year age group in 2050 (projection) 17
Figure 3. Real annual GDP growth, 2000-17 18
Figure 4. Value added and annual growth of three key sectors, 2000-17 18
Figure 5. Growth rates of GDP and jobs, 2000-17 19
Figure 6. Jobs' elasticity to growth, 2000-17 19
Figure 7. Cross-country comparison of decomposition of growth in per capita value added, 2000-17 19
Figure 8. Cross-country comparison of decomposition of labor productivity change, 2000-17 19
Figure 9. Changes in productivity and employment share of three key sectors, 2000-17 20
Figure 10. Agricultural output in Pakistan and selected countries, 2005-15 20
Figure 11. Imports as share of GDP, 2000-17 21
Figure 12. Exports as share of GDP, 2000-17 21
Figure 13. Export structure by sector in Pakistan, 2000 and 2017 22
Figure 14. Export structure by sector in Vietnam, 2000 and 2017 22
Figure 15. Gross fixed investment as share of GDP, 2000-17 22
Figure 16. Foreign direct investment as share of GDP, 2000-17 22
Figure 17. Total number of outmigrants from Pakistan, 2006-17 23
Figure 18. Remittances as share of GDP, 2000-17 23
Figure 19. Labor force participation rates of men and women in rural and urban areas, 2001-17 24
Figure 20. Employment ratio of men and women in rural and urban areas, 2001-17 24
Figure 21. Net increase in employment by sector across three time periods, 2000-17 25
Figure 22. Changes in sectoral share of employment across three time periods, 2000-17 25
Figure 23. Three key sectors' employment share in urban areas, 2001, 2008, 2014, and 2017 25
Figure 24. Three key sectors' employment share in rural areas, 2001, 2008, 2014, and 2017 25
Figure 25. Men's employment status in urban vs. rural areas, 2001, 2008, 2014, and 2017 26
Figure 26. Women's employment status in urban vs. rural areas, 2001, 2008, 2014, and 2017 26
Figure 27. A snapshot of Pakistan's labor market in 2017 27
Figure 28. Rural and urban women's labor force participation rates by province, 2017 27
Figure 29. Rural and urban men's labor force participation rates by province, 2017 27
Figure 30. Unemployment rates by gender, education, and urban/rural location, 2017 28
Figure 31. Unemployment rates by age group and income quintile, 2015 28
Figure 32. NEET share by age, gender, and urban vs. rural location, 2017 28
Figure 33. Cross-country comparison: NEET share among youth (ages 15-24), various years 28
Figure 34. Beliefs regarding women's work outside the home by urban vs. rural location 29
Figure 35. Labor force participation rates by income quintile and gender 29
Figure 36. Women's mobility: General perceptions of what is appropriate 30
Figure 37. Women's own perceptions of their personal safety while walking in public 30
Figure 38. Monthly per capita expenditure by household head's employment type 31
Figure 39. Employment type by welfare quintiles 31
Figure 40. Distribution of employment sector by gender, 2017 32
Figure 41. Distribution of employment status by gender and urban vs. rural location, 2017 32
Figure 42. Prevalence of formality by employment status and urban vs. rural location, 2017 33
Figure 43. Earning by level of formality among wage employees, 2017 33
Figure 44. Share of formal wage workers by sector in Pakistan, 2017 34
Figure 45. Share of formal wage workers by sector in Bangladesh, 2016 34
Figure 46. Average weekly hours worked by gender and urban vs. rural location, 2017 34
Figure 47. Share of those working less than 35 hours per week by gender and province, 2017 34
Figure 48. Distribution of educational attainment of working age population by gender, 2001-17 36
Figure 49. Mean years of schooling by birth cohort and gender 36
Figure 50. Educational distribution of working-age population by urban vs. rural location, 2017 37
Figure 51. Cross-country comparison: Literacy rates 37
Figure 52. Net enrollment rates of children aged 5-16 by gender, 2015 38
Figure 53. Net enrollment rates of children aged 5-16 by gender and poverty status, 2015 38
Figure 54. Dropout rates by grade level and poverty status, 2015 38
Figure 55. Percentage of children aged 10-18 who are working, by gender and poverty status, 2015 38
Figure 56. Returns to education over time by gender and education level 40
Figure 57. Monthly earnings by gender and education level, 2001 and 2017 40
Figure 58. Returns to education by employment status (wage vs. self-employed), 2015 41
Figure 59. Returns to skills by employment status (wage vs. self-employed) and skill type, 2015 41
Figure 60. Classification of household enterprises 45
Figure 61. Share of nonfarm, nonagricultural household enterprises by province, 2015 45
Figure 62. Share of nonfarm, nonagricultural household enterprises by rural vs. urban location, 2015 45
Figure 63. Employment structures of nonfarm, nonagricultural household enterprises in urban vs. rural locations, 2015 46
Figure 64. Shares of households running nonfarm, nonagricultural enterprises in rural vs. urban locations, 2007 and 2015 46
Figure 65. Shares of rural nonfarm, nonagricultural household enterprises by sector or activity, 2015 47
Figure 66. Shares of urban nonfarm, nonagricultural household enterprises by sector or activity, 2015 47
Figure 67. Number of individuals working in nonfarm, nonagricultural household enterprises by province, 2015 47
Figure 68. Number of individuals working in nonfarm, nonagricultural household enterprises by employment structure and by rural vs. urban location, 2015 47
Figure 69. Educational attainment (in years) of household head running a nonfarm, nonagricultural household enterprise by employment structure and rural vs. urban location, 2015 48
Figure 70. Share of household heads running a nonfarm, nonagricultural household enterprise who own property by employment structure and type of property, 2015 48
Figure 71. Yearly profits of nonfarm, nonagricultural household enterprises by employment structure and urban vs. rural location, 2015 49
Figure 72. Yearly profits of nonfarm, nonagricultural household enterprises in two key sectors by urban vs. rural location, 2015 49
Figure 73. A comparison of key characteristics across households that run a nonfarm, nonagricultural enterprise vs. those that do not, 2015 49
Figure 74. Poverty rates of nonfarm, nonagricultural household enterprises by employment structure and sector, 2015 50
Figure 75. Poverty rates of nonfarm, nonagricultural household enterprises in general and by rural vs. urban location, 2015 50
Figure 76. Selected countries' market share of freelancing work, by type of work, 2017 52
Figure 77. Increases in population by province, 1998 and 2017 53
Figure 78. Increases in number and share of workers by province, 1999 and 2017 53
Figure 79. Distribution of workers over time in rural vs. urban areas by number and share of total 54
Figure 80. Changes in the urban share of workers over time by province 54
Figure 81. Increase in the prevalence of internal migration by destination province, 1999-2017 55
Figure 82. Population growth in capital districts by number and percentage, between 1998 and 2017 55
Figure 83. Prevalence of internal migration by education level, 2017 56
Figure 84. Average years of schooling by migrant status and pattern of migration, 2017 56
Figure 85. Employment type by migrant status and pattern of migration, 2017 56
Figure 86. Sector of employment by migrant status and pattern of migration, 2017 56
Figure 87. Number of outmigrants and remittances as share of GDP, 2006-17 58
Figure 88. Differences in monthly earnings, 2015 59
Figure 89. Share of those intending to migrate abroad across various characteristics 59
Figure 90. Likelihood of reporting an intention to migrate abroad across various characteristics 59
Figure 91. Share of outmigrants by destination country, 2005-17 60
Figure 92. Share of common occupations of Pakistani migrants, 2010-17 60
Figure 93. A migrant's journey 61
Figure 94. Main sources of information used to find a job in a foreign destination by migrants' country of origin, 2015 62
Figure 95. Average migration costs by sending country and funding source, 2015 63
Figure 96. Average migration costs in months of earnings by origin and destination, 2015 63
Figure 97. Association between duration of stay (in months) and cost of migration (in US$) 64
Figure 98. Association between duration of stay and monthly earnings (in US$) at destination among Pakistani migrants 64
Figure 99. Characteristics of nonmigrants vs. former migrants among working-age men 65
Figure 100. Shares of rural and urban residents by prior migration and employment status 65
Figure 101. Shares of unemployed rural and urban residents by migration status 65
Boxes
Box 1. definitions of employment status and type used in the report 14
Box 2. transport and women's labor market activities 30
Box 3. measurement and prevalence of informality in pakistan 35
Box 4. child labor in pakistan 39
Box 5. definitions of business establishments under labor regulations in pakistan 42
Box 6. katchi abadis and slums in pakistan 57
Table A.1. Summary of background papers and data sources used in the Jobs Diagnostic 80
Figure B.1. Likelihood of working in wage employment, 2017 81
Figure B.2. Likelihood of working in agriculture, 2017 81
Figure C.1. Institutional arrangements of Pakistan's migration system 83
Figure C.2. Distribution of overseas employment promoters by location 85
Figure C.3. Distribution of overseas employment promoters by capacity 85
Appendix Boxes
Box C.1. key institutions under the ministry of overseas pakistanis and human resource development 84