Pakistan’s unemployment rate has climbed to 7.1% under updated global labour standards reflected in the Labour Force Survey (LFS) 2024-25, signaling a significant shift in how employment is measured nationwide. By contrast, the older ICLS-13 methodology places the rate slightly lower at 6.9%, compared with 6.3% recorded in the 2020-21 survey. The increase is largely attributed to Pakistan’s transition to the 19th International Conference of Labour Statisticians (ICLS) framework, which applies a stricter definition of employment, excluding subsistence agriculture workers and other own-use producers from the employed population. As a result, around 2.5 million subsistence farmers are no longer counted as employed in 2024-25, with the labour force under the new definition standing at 83.1 million, down from 85.6 million under the older standard.
The shift in methodology also affects broader labour market indicators. The share of the inactive working-age population fell from 55.1% in 2020-21 to 52.4%, while labour force participation increased from 44.9% to 46.3% despite the exclusion of subsistence farmers. Inclusion of these workers would have raised participation to 47.7%, reflecting gradually improving confidence in employment opportunities. Historical trends show earlier improvements followed by renewed pressures, as unemployment dipped from 6% to 5.8% between 2013 and 2018, only to rise again to 6.9% amid slower economic growth and structural reforms linked to the IMF programme.
Sectoral analysis indicates that Pakistan’s employment landscape continues to shift away from agriculture. The share of agricultural employment declined from 37.4% in 2021 to 33.1% in 2024, while the services sector expanded from 37.2% to 41.2%, and industry remained relatively stable. Wage indicators suggest strong nominal growth, with average monthly wages increasing from Rs 24,000 to Rs 39,000 since 2020-21. Gender wage gaps narrowed significantly, decreasing from Rs 4,500 per month to less than Rs 2,000, largely due to stronger labour market outcomes for women. Entrepreneurship is rising, particularly among women, with own-account workers increasing from 35.5% to 36.1% and female entrepreneurship growing sharply from 19% to 25.2%. Meanwhile, contributing family workers, predominantly unpaid women, declined from 21.1% to 19%, signaling a shift toward paid employment.
For the first time, the survey captures participation in the gig economy, revealing that 2.9% of workers rely on gig-based primary employment, while 10.6% engage in secondary gig work. Women account for a larger share of secondary gig work at 15%, compared with 9.8% of men. Unpaid domestic and caregiving activities remain substantial, with 117.4 million individuals, including 66.7 million women, engaged in household work. Women continue to bear a disproportionate share, performing 76% of unpaid labour compared with 55% of men. PBS has released all key labour indicators under both old and new ICLS standards to maintain comparability across survey cycles, marking Pakistan’s full alignment with international labour reporting practices.
Officials stress that the updated framework provides a clearer picture of employment, productivity, and labour market pressures, supporting government efforts to revive investment, strengthen industry, promote exports, and generate formal sector jobs. The survey also highlights opportunities to support women’s economic participation, enhance gig work integration, and formalize Pakistan’s evolving labour landscape.
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