Developing Labour Market Information System for Informal Sector in Pakistan

The informal sector (IFS) is seen as having the potential to adequately respond to the growing unemployment problem in Pakistan. Easy access, and low skill and investment requirements of a variety of activities in this sector correspond well with the stock and annual additions to the labour force and the available financial resources. This sector is still absorbing a large proportion of the labour force in rural and urban areas. It is also contributing significantly towards developing the skill base of the labour force.1 (see Annex Tables I-III.) Bu~ the fact remains that its development is rather haphazard with the result that the potential which this sector offers remains poorly utilised. Firstly, adequate dis aggregated information on this l sector is stilllackillg. This often results in the undertaking of activities, but, without taking cognisance of market conditions and availability of adequate consumer demand. A number of -such activities, hence, face the risk of failure at the outset.. Secondly, there is a lack of disaggregated information on the stock of the labour force and annual additions to it, and also on employment patterns. This affects support activities, if any, as adequate feedback is not forthcoming on market con,ditions, new entrants into the labour market and the unemployed. Availability of disaggregated information is necessary for undertaking support and development activities for this sector.