Pakistan Institute of Development Economics



Short-Term Employment Functions in Manufacturing Industries: AnEmpirical Analysis for Pakistan

The most challenging issue facing Pakistan today is the highrate of growth of population and labour force which is a major obstacleto the development of the country. The current problem of unemploymentis becoming serious and is deeply rooted in the economic, social andpolitical conditions of the economy. The consequences of rapidindustrialisation on employment generation in Pakistan has also beenvery disappointing. The manufacturing sector in Pakistan has grown at anaverage annual rate of around 6.0 percent during the 1970s and 8.7percent during the 1980s. Manufacturing output has risen from 16.5percent of the GDP during the 1970s to 19.1 percent during the 1980s.The manufacturing sector has failed to generate sufficient employmentfor new entrants in the labour force. Over a period of 18 years from1969-70 to 1986-87, only 14.0 percent of the total labour force couldget employment in the manufacturing sector. A low creation of employmentopportunities is also manifest in the fact that the growth rate ofemployment in the manufacturing sector has declined considerably from2.4 percent during the 1970s to 1.0 percent during the 1980s.

Zafar Iqbal, Khalid Hameed Sheikh.

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