ISLAMABAD – Pakistan’s unemployment rate is expected to rise to around 7% in the fiscal year 2024–25, up from 6.3% in 2020–21, according to sources familiar with the latest Labour Force Survey (LFS). The findings were shared during the recently held DataFest conference, although some experts raised questions regarding employment data for Islamabad Capital Territory (ICT) and other areas. The government is likely to release the official LFS results next week.
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The 2020–21 survey reported that Pakistan’s labour force had grown to 71.76 million, with an overall employment-to-population ratio of 42.1%. Male participation stood at 64.1%, while female participation was significantly lower at 19.4%. The services sector employed the largest portion of workers, while youth aged 15–24 experienced the highest unemployment at 11.1%, especially among females.
The latest LFS for 2024–25 adopts the 19th International Conference of Labour Statisticians (ICLS) definitions of employment and labour force participation, in line with International Labour Organization (ILO) recommendations. This is a major update from the previous 13th ICLS framework, which classified anyone working even one hour for pay, profit, or in a family business as employed. The new framework distinguishes paid work from own-use production work.
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Under the 19th ICLS, individuals engaged in household production, subsistence farming, or unpaid family work may no longer be counted as employed unless they are available for paid work. This change is expected to lower reported labour force participation and employment rates, while increasing the unemployment rate. Rural women and unpaid family workers are particularly affected by the new classification.
Experts note that the revised methodology provides a clearer picture of Pakistan’s labour market by focusing on individuals actively participating in income-generating activities, excluding unpaid household work. The adoption of this framework marks a significant step toward modernizing employment statistics and aligning them with international standards.
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