Wednesday, December 22, 2010

Labour Force Participation

The labor force in Pakistan is steadily increasing. From 9.8 million in1951 it rose to 37.7 million in 1998. However, the percentage of the total population in the labor force has not risen. It dropped from 30.7 percent in 1951 to 28.7 percent in 1998. This is much lower than in the 40 percent which is the world average. The fall in the labor force participation ratio in Pakistan means that for every person in the workforce, there are a greater number of dependents The percentage of men in the labor force is 86.5 and that of women 13.5. The share of the rural population in employment is 51.7 and that of the urban population 31.3 percent.
Sectoral Employment.
For a long time, the primary sector agriculture, forestry, fishing, and mining has absorbed the majority of the labor force in Pakistan. Its percentage share is, however, on the decline. In fact, in 1997 it lost the leading position to tertiary or services sector. The bulk of the labor force in the primary sector is engaged in agriculture. The decrease in the phenomenon. The increased use of machinery in farming and the emergence of services like trade, transport, banking, insurance, advertising, communications, have been primarily responsible for this. About 4 percent of the labor force of the United States and 8 percent of the labor force in Japan is employed in the primary sector todya.
The share of manufacturing in Pakistani labor force increased from 11.6 percent in 1951 to 20.2 percent in 1961, Thereafter it started to decrease. In 1997, its share was 11.2 percent and all time low. The automation of the industrial sector and the increasingly competitive world market for manufactured goods have put a barrier on the entry of fresh labor into manufacturing sector in Pakistan. In comparison, the United States employes 18 percent of its labor force in manufacturing and Japan 24.
The tertiary sector is second to the primary sector in employment. Its share started to increase after 1961. In 1997 it became the leading employer when 44.7 percent of the labor force was engaged in tertiary activities. The emergence of the tertiary sector is a worldwide phenomenon and is much more pronounced in the developed nations. particularly after the 1960's. About 78 percent of the labor force in the United States works in the tertiary sector and in Japan 68. The reasons, however for the increase in the number of workers in the tertiary sector differ in the developed and developing world. Developed countries went through a gradual evolution over a number of years from primary, secondary to tertiary. Unfortunately in less developed countries like Pakistan the manufacturing sector has been overtaken by services, even before it has had a chance to grow In the developed world, business, finance, insurance, transport, telecommunications, health and education are important tertiary activities. In less developed countries, the share of finance, business, telecommunications, health and education is smaller, there are larger number of workers employed in personal services, like domestic help, hairdressing, shoe repair, peddling.

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