Decoding Joblessness in Pakistan: A Generational and Temporal Analysis

Henna Ahsan and Amena Urooj
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Henna Ahsan: Pakistan Institute of Development Economics
Amena Urooj: Pakistan Institute of Development Economics

No 2026:6, PIDE-Working Papers from Pakistan Institute of Development Economics

Abstract: Unemployment has been acknowledged as one of the most important socioeconomic problems faced by developing nations, especially Pakistan. It is a sign of underlying structural imbalance in the economy, in addition to reflecting the labour market inefficiencies. It is argued that due to the higher education expansion in Pakistan during the last two decades and due to high youth bulge in the country, the young cohort entering the labour market are experiencing high unemployment. So, to understand and analyse this complex phenomenon, the Age-Period-Cohort (APC) model provides a nuanced approach in understanding unemployment rates simultaneously with other control variables. For analysis, data was acquired from the labour Force Survey (LFS) 2001-02 to 2024-25 covering twelve alternative waves. The results indicate that higher education, with increase in skills and productivity, helps individuals to escape from unemployment. However, cohort analysis shows vulnerability of young, educated cohorts to unemployment as compared to the older cohorts. This effect is more pronounced in tertiary education.

Pages: 31
Date: 2026
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