Literature Review On Unemployment In Pakistan

LITERATURE REVIEW

In this article Gul , Zaman , Khan and Mehboob (2012) examined how unemployment affects the economic life in urban areas of Pakistan. Unemployment has different types which include frictional unemployment, structural unemployment and last but not the least cyclical unemployment. To testify the various hypothesis different variables have been taken in which dependent variable is unemployment spell and independent are economic, psychological and social factors. These variables are further analyzed through correlation of coefficient, descriptive statistics, regression analysis and one technique of ANOVA trough analysis. Findings indicate that unemployment and inflation tend to reduce satisfaction but coefficient of unemployment

The variables used in the study are employment level, FDI, exchange rate and GDP. Employment level is the dependent variable whereas exchange rate, GDP and FDI are the independent variables in this study. Johanson Cointegration method has been used to test long run relation between variables. Findings indicate a direct relation between employment level and FDI and GDP and an indirect relation between exchange rate and employment level as 1 unit increase in FDI and GDP results in 66143.98 units and 10.44293 units increase in employment level respectively whereas a unit increase in exchange rate reduces employment level by 5669.459 units. Therefore monetary authorities are advised to keep exchange rate stable and labour force must be taught the use of advanced technology to help increase its employability. Also development of SME’s must also be

GDP and Unemployment rate were the variables in this study. Previous research on this topic gave mixed results; some gave positive relation and others didn’t so this paper examined this issue using ARDL bounds testing approach to co-integration. This was done in two steps; first of all long term relation was checked using extreme values of bounds test then income elasticities for short and long run were calculated through ARDL Model. Data was obtained from statistical year books published by government of Pakistan and “World Development Indicator” of World Bank. Growth Rate was calculated from this data. Results obtained confirmed long term relation between Unemployment Rate and GDP Growth in Pakistan. Income elasticity for long run was negative and significant at 5%, proving a 1% increase in economic growth as a result of 1.665% decrease in unemployment rate. Though, the results are insignificant in long run. In the light of these findings, attempts must be made to make domestic environment more business, investment and production friendly to achieve high economic growth and minimize unemployment