A Study on Determinants of Unemployment in Pakistan

This study has been carried out to examine the determinants of unemployment in Pakistan for the period of 1981–2010 using Regression Model, descriptive stats and graphs. Population growth, Interest rate, foreign direct investment, gross domestic product and literacy rate in Pakistan are being used as explanatory variables. Also the state of democracy in the country has been taken into consideration. Findings include that population growth fuels unemployment positively and where as literacy rate and foreign direct investment has negative impact on unemployment. Often it is perceived that unemployment rate of rural areas is greater because in rural areas there are less chances of employment as compared to urban areas where there are more chances of employment due to more industries. Political regime is also taken into consideration as a dummy variable. In this research we also analyze factors underlying the employment, study the trends of variables involved in the study and suggest recommendations for reduction in unemployment in Pakistan. Numerical data collected from various sources which will be presented in forms of charts and tables and will be given statistical and mathematical treatment through use of E-views. The study is by and large descriptive in nature all the findings will be analyzed theoretically and objectively.