State of Graduate Unemployment in Pakistan

By Mr. Aqeel Chaudhry and Mr. Fida Muhammad Khan

Graduate Unemployment and the HEC

The government formed HEC in 2002. It replaced the UGC as the regulatory body of HEI’s in the country. There are now 210 HEIs, and as in many other sectors, the government has a significant presence in this sector too. Total HEI’s in the private sector are just 83. As of 2019, the graduate unemployment (GUE) rate is touching 16.5%.  The following figure shows the unemployment trend for university graduates since 1999.

Figure: Graduate Unemployment in Pakistan (1999 – to date)

We estimated the average unemployment rate for the same period and found it to be 9.54%. The Highest value attained by GUE during this time period was 20.1% during 2014-2015. GUE was at its minimum during 2007-2008 with a value of 4.9%. the average annual increase in the GUE for the period 1999-2019 has been 0.74 percent. The figure below shows that there has been a positive trend in GUE.

Figure: Percentage Increase in GUE

The Graduate Learning Environment

At the time of independence, Pakistan had only 2 universities, which had around 600 students enrolled. In 1998-99 the number of universities had increased to 26, while the participation rate was less than 2%. In 1999-2000 the number of universities increased to 27. The Government issued charters to about 20 universities in the four years from 1995 to 1999. 16 out of those were private sector universities while 4 were public sector. By 2000, we had 59 universities.

Since the HEC’s creation in 2002, Universities are being established at a faster rate, with 185 in 2016 and over 200 today. The question is that why should there be so many DAI’s? Why are we allowing universities to multiply so fast? We have not reported the data on the affiliated colleges and government colleges upgraded to DAI’s and now offering Bachelor’s and Master’s programs.

Newly Minted Graduates and the Job Market

Graduates are coming out, yet the market can’t absorb this vast supply. This has led to GUE. The Government’s responsibility is visible because it has made the establishment of universities a straightforward process and has not kept a check on the number of student intakes by universities. We can keep the student intake numbers in check and regulate establishment of new universities. This will curb the problem of graduate unemployment to a great extent.

In assessing the market requirements, HEC should allow for a certain number of students’ intake, especially in social sciences and engineering. The way every university is taking so many students in business management, engineering, economics, and other social sciences should be weighed against the demand for such degrees. Perhaps there should be a quota for every university. Then by the time those students graduate, we can expect the market to absorb the new lot. Such a system would also improve the quality of graduates. 

The second major issue is that of university quality. We need deeper analysis of the graduates we produce, the curricula we teach, and the environment we provide on campus, and the exposure we give to him/her. Grades alone don’t make one able to end up having a good job. There are a lot of other factors responsible for that. So when a student does not have the exposure and required “on-campus“ environment, he/she cannot compete in the market. They are unemployed or underemployed, and consequently, add to national unemployment.

Tackling the Issue

Since all local universities have to follow HEC guidelines, they should require university programs that enhance the student’s job-seeking skills. We should provide exposure to the students. And we must assess what are the job market requirements and what is being produced in universities. Keeping in view market needs and demand the university should adopt processes to equip their graduates with needed market skills.

So unemployment is not solely because of government policies. Neither is it possible that we have everyone in the economy employed. However, we can direct polices towards increasing job prospects, making the job market more and more efficient and competitive. And for that we believe that we should restrict student intake, and the universities should provide an environment conducive to grooming, and all this should be market-based. As, and when, the market environment changes, the university should change likewise so that their products can compete in the market.

A third party should scrutinize the programs being run by all universities to maintain impartiality and remove any hint of bias that would arise from a similar scrutiny by HEC. After the 18th amendment, we need to renegotiate the role of HEC as every province will have its own commission. Till now only Punjab has instituted its Commission. Every local area has its own needs and universities should work on those needs rather than offering programs for all walks of life.


  1. Agree with the quality part, because this is where the real problem lies. But disagree with the suggestion to limit the number of students as per market demand. First, there is no way (at least in Pakistan) to gauge the demand. Even the unemployment statistics are not reliable, aside from the others. Second, its not clear that such a strategy has ever worked in any part of the world (not sure if it has ever been employed!). The most vibrant, job creating economies are where there is no such compulsion upon the universities regarding intake. Job market and demand is affected by many variables, and restricted supply of graduates is the least considered of those (if at all). Instead, when it comes to jobs and poor market conditions in Pakistan, the focus should be mainly on three things: the way state regulates the economy, our population growth and overcoming the ‘sarkari naukri’ culture. The first to are self explanatory, while in terms of the last, we’ve got to change the way we train our youngsters. They should be inclined towards entrepreneurship rather than getting education with the ultimate aim of appearing for the CSS exam to get a pakki naukri. It is only with a culture of perpetuating and supporting the innovative entrepreneurs and businesses rather than interest groups, lobbies and bureaucracy that we can create a healthy, vibrant job market

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