Pakistan Institute of Development Economics



Trend of Rural Employment and Wages in Pakistan

Trends in rural employment and wages are important in a numberof ways. For example, a steady growth of job opportunities is aprecondition for productive employment of labour force under rapidgrowth of population. Rising real wages of the working class would beessential for incessant improvements ih the standard of living of themasses. Lack of sufficient employment opportunities in rural areastogether with the consequent stagnating (even declining) wages may be apotential cause of mass movement of rural labour to urban areas andattendant formidable economy-wide problems. Similarly, aggregate growthrates of employment and wages in contrast with those in productivesectors have an important bearing on trends in income distribution andpoverty. Rapid growth of population, predominance of rural sector and ageneral lack of studies on rural labour market conditions in lessdeveloped countries, including Pakistan, call for a study such as thepresent one, which explores the trends of rural employment and wages inPakistan. The paper carries four sections. Section 1 surveys the presentstate of the rural labour market. Section 2 reports trends in ruralemployment and discusses the various factors underlying those trends.Employment situation being the basic determinant, wage trends,especially those in agriculture, are highlighted in Section 3. Section 4summarises the findings of the study and in their light makes somepolicy recommendations.

Ghulam Mustafa Chaudhry, M.Ghaffar Chaudhry

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