Veteran economist claims unemployment rate has risen to 22%

ISLAMABAD: The unemployment rate in Pakistan stands at 22 percent, said by former minister for finance and noted economist Dr Hafiz A Pasha triggering a heated debate.

Although the government has not yet made any statement publicly, the economist belonging to the Ministry of Planning and Finance were finding it hard to justify their official claims.

This census data shows that the unemployment rate has gone up to 22 percent, indicating that over 20 million youth aged between 15 to 24 years are idle. This youth bulge finds no space to work and prefers to leave the country if finds any opportunity.

Dr Hafiz A Pasha while talking to The News on Friday confirmed that the latest 7th Population and Housing Census 2023 first time held digitally shows alarming results on unemployment as it has gone up to 22 percent. He said that the unemployment rate among male stood at 30 percent while in female it was hovering around 17 to 18 percent. “This is reliable data as the Pakistan Bureau of Statistics (PBS) conducted this Housing and Population Census 2023.” Dr Pasha added.

He was of the view that the Labor Force Survey (LFS) was a sample based survey which was just friction of hardly less than 1 percent so this population and housing census provided hard data showing increased numbers of unemployment among the working youth. He said that the last LFS was done in 2020-21 indicating unemployment rate of 6.5 percent and termed it a biased survey.

Dr Pasha also challenged the GDP growth figure of 2.68 percent for the last fiscal year arguing that the electricity generation and distribution was shown a growth rate of 22 percent, an unbelievable figure. The second highest growth, he said, was shown in public administration and spending whereby the growth rate of 10 percent was achieved.

On other hand, the Ministry of Planning has contested these figures and argued that according to 2023 Digital Census and 34 percent educated youth unemployment. The estimates are used from Table -14 of Census 2023 in which unemployed plus employed are taken as total labour force. Hence unemployed number is divided by the labour force number and result is 22 percent.

However, the calculation method of unemployment using 2023 census data looks different than Labor Force Survey (LFS) method due to difference in reference period of both Census and LFS. Data collection method for employment in LFS is a 15 days reference period whereas one year is a reference period in Census 2023. The unemployment rate calculation can differ between a census and a Labour Force Survey (LFS) in Pakistan, primarily due to different methodologies and reference periods. Censuses typically use a “usual status” approach, while LFS usually uses a “current status” approach.

The main difference lies in the reference period used to determine employment status. LFS uses a shorter reference period (e.g., one week or one month) to capture more recent employment activity, while the census uses a longer reference period (e.g., one year).

The LFS is specifically designed to collect detailed information on labor market trends, including employment, unemployment, and labor force participation. However, it is ironic that there is LFS done in the last few years since 2021-21.