final project of rmrw unemployment

8/4/2019 Final Project of Rmrw Unemployment

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Research on Unemployment

MUHAMMAD EJAZ BALTI

QUAID E AZAM UNIVERSITY ISLAMABAD

MASTERS IN PUBLIC ADMINISTRATIONS

SUBMITTED TO SIR DR. TAHIR SAEED

GROUP MEMBERS:

MUHAMMAD EJAZ

ASIM ASLAM

SAIRA

ANEES AYUB

AEYSHA

Research Methodology and Report Writing

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ACKNOWLEDGEMENT

All prayers for Allah almighty who is the most merciful and beneficent for every

torch of guidance and knowledge for humanity. We offer humblest and sincerest

works of thank to our God Almighty who blessed us with potential and ability to

make material contribution to already existing ocean of knowledge.

Heartiest thanks to Mr. Waqar Ahmad, Mr. M Shamim, Mr.Syed Hasnat, Mrs.

Ferzana Naheed Khan, Mr. M Azam, and M. Ali Khan for their cooperation for

giving interviews. Thank to all students and employees who has filled up the

questionnaire. Thanks to the librarian and staffs of the library of PIDE.

Thanks to our Parents who have able us to get education and be here. At last we

thank our teacher Mrs. Mehnaz Khan who has made us able to complete this

research.

Muhammad Ejaz Balti


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EXECUTIVE SUMMARY

Human capital is indeed a very important factor in the progress and

prosperity of a nation but unfortunately this precious resource has been

wasted in the form of unemployment. It is most serious challenge and problem

to all industrial, agricultural, developed, developing and poor countries. Some

are facing more and some are facing less.

In this research report we have discussed the unemployment causes and its

affect, through literature survey. The next step was the theoretical

framework; we have tried our best to develop a hypothesis in order to find out

the broad problem statement. After this we have made operational definition

of unemployment, in order to find out about its characteristics. In data

gathering we have conduct interviews and fill up the questioners from 30

persons. After all we have done our recommendation and conclusion in a very

logical way.


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INTRODUCTION

Unemployment is the most serious challenge and problem to all industrial, agricultural,

developed, developing and poor countries. Yet unfortunately developing countries have

not given due importance to develop this factor of production. In most of developing

countries including Pakistan human capital has been given a secondary importance. At the

same time high growth of population and labour force with limited physical and natural

resources has proved to be a drag on development in the developing countries.

Definition of Unemployment

According to Labour Force Survey The Unemployment comprises of all persons ten

years of age and above whom during the reference period were:

a) Without work i.e. were not paid employed or self-employed;

b) Available for work i.e. were available for paid employment or self-employment

during the reference period; and

c) Seeking work.

The measure of unemployment is the number of jobless people who are available for

work and are actively seeking jobs. The unemployment rate is unemployment as a

percentage of the labor force.

Unemployment is that situation where people above ten years are seeking for work and

are able of doing the work but are not provided any job.

Unemployment is that economic interpretation and maneuvering when in a country there

are a large number of able bodied persons who are willing to work and cannot find it at

the current rate of wages. So a person will not be unemployed if he or she is not willing to

work more than the normal hours of work per day or for less than the current rates of

wages.

This term denotes the labor market status of persons 10 years and older who did not work

at all during a reference week but were available for and actively seeking work; also


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includes those who were waiting to be called back to a job from which they had been laid

off or waiting to report to a new job scheduled to start within the next 30 days.

www.wa.gov/ftp/esd/lmea/usergude/glossary.htm

A condition that exists when a labor force has workers able, ready and willing to acceptemployment and are without jobs, a statistical measure defined as a percentage of a labor

force. A tight labor market is generally indicated by a statistical reporting of less-than-3%

unemployed because there is a bottom layer of unemployed considered to be

unemployable. Events such as recent closings or layoffs or announcements of possible

closings or layoffs may not show up in statistics or labor information available from

indirect sources.

In modern economics, we think of the population as having three components:

1. Those who are employed,

2. Those who are unemployed, and the rest,

3. Who neither are working nor are seeking work.

The first two groups -- those who are employed and who are seeking work -- together

comprise the labor force.

The Labour Force

The labor force consists of all those persons who are willing to work at a market

equilibrium wage, and who either have jobs or are seeking work. In Pakistan on the basis

of the estimated population approximately of 170.00 million and the participation rate of

39.61%, as per the Labour Force Survey 2001-02, the total labour force is estimated at

45.05 million. Of this, 30.19 million or 67.03% is the rural areas and 14.85 million or

32.97% is in the urban areas. The distribution of the labour force from 1995 to 2004 by

rural urban areas is given in the following table.


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Rural-Urban Labour Force

Labour Force Rural Urban

Year Million

No

Annual

Growth

Million

No

% Share Million

No

% Share

1995 34.18 - 23.96 70.09 10.22 29.90

1996 35.01 2.43 24.27 69.32 10.74 30.68

1997 37.46 7.0 26.02 69.46 11.44 30.54

1998 39.25 4.78 27.57 70.24 11.68 29.76

1999 40.16 2.32 28.11 70.00 12.05 30.00

2000 40.55 0.97 27.96 68.95 12.59 31.05

2001 41.39 2.07 28.44 68.71 12.95 31.29

2002 43.22 4.42 28.98 67.05 14.24 32.95

2003 (E) 44.13 2.00 29.59 67.05 14.54 32.95

2004 (E) 45.04 2.06 30.19 67.03 14.85 32.97E=Estimated

Source: Labour Force and Its rural-urban distribution calculated on the basis of Labour Force Surveys of

respective years.

To measure the importance of unemployment in a nation's work force, we use the

unemployment rate: The unemployment rate is a ratio, obtained by dividing the number of

unemployed persons by the number of persons in the labor force. Thus, the rate of

unemployment is a fraction, less than one. It is usually expressed as a percent.

Unemployment Rate = No. of Unemployed Persons * 100

Total Labor Force

If we are interesting to know the Unemployment Rate of Pakistan for 2004 so by applying

the figures of the same year we can calculate it as

Unemployment Rate = 3.72 * 100

45.04


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= 8.26 %(Govt. of Pakistan figures)

The Concepts of Unemployment and Underemployment

The above two concept are different from each others. A worker is clearly unemployed

when he is involuntarily out of work. This is the man who is stranding in a relief line or a

bread line or waiting to pick up his unemployment compensation check. This is a case of

apparent unemployment or simply unemployment; the worker obviously has no job

connection. On the other hand, a worker may have a job but still be in a sense

unemployed. For example, a worker who is harvesting wheat by hand or cutting a lawn

with a pair of scissors is partially unemployed. In this case, however, it is a matter of

Disguised Unemployment or, more simply, Underemployment. Here the worker has a job

but simply is not being employed efficiently.

Types of Unemployment

Unemployment may be of any of the following kinds.

1. Transitional or Frictional Unemployment:

Transitional or Frictional unemployment occurs when people move from one job to other

requiring similar skills. It is caused by normal shifts in the supply of and demand for

products. It is generally temporary, lasting a few days to a few days to a few weeks.

2. Cyclical or Deficient-Demand Unemployment:

Cyclical or Deficient-demand unemployment arises from downswings of the business

cycle that is, by a broad-based reduction in the overall level of spending in the economy.

It generally lasts for a period of weeks or months, until an increase in business activity

raises national output and increases demand for labor.

3. Structural Unemployment:

Structural unemployment is caused by major changes in the skills needed by workers,

because of technological innovation or changes in the relative competitiveness of an


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industry. Structural unemployment can last for years, until workers are retrained for new

jobs.

Problem Statement of the Research

Research is the process of finding solutions to a specific problem of our interest after a

thorough study and analysis of the situational factors. In case of our research the problem

of our interest is Unemployment. The purpose of our research is to ascertain the causes of

unemployment which is done through finding various variables affecting it. It should be

noted that this research only identifies the variable affecting the Unemployment not other

things like Underemployment, Economic inefficiency etc

Literature Review

A person is not to be (Azmat Wazir 2002) regarded as unemployed, if he or she desires to

work but is prevented from doing so by sickness or chronic disease. But mere engagement


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in some occupation also does not mean the absence of unemployment. Some persons may

be partially employed or may have to do inferior jobs. Persons who are, of course, unfit

on physical, mental or moral grounds or who have no desire to be employed are excluded

from the category of the unemployed are the following:

1. In almost all industries, there are sudden fluctuations of economic activity. So causal

employment arises because of the maladjustment between the demand for and supply of

labour because during the busy period of economic maneuvering, employers call for the

employment of new hands to meet the increased demand of the consumers. But the

reverse will happen during a slump.

2. Many economic activities are seasonal in character. In agricultural countries,

cultivators are engaged for some months of a year; for the rest of the year, they remain

almost idle or jobless. In some industries also workers get jobs only for a certain period of

time. Climatic and social factors are mainly responsible for this type of seasonal

unemployment. Suitable and convenient climate of an area or country favors and

contributes to the economic development of that area or country. Extreme hotness or

extreme cold opposes economic development. The best counter action to resolve the

seasonal job issue by establishing small scale and cottage industries.

3. There are many ups and downs and cyclical fluctuations in industry and alternative

periods of booms and depressions. There trade cycles have a great influence on the

volume of unemployment, which decreases when trade is good and increases when it is

bad.

4. Unemployment may result from changes in industrial techniques, in the methods of

production, or from the growth of new trades and the decline of old ones. Modem

businesses are dynamic and the entrepreneur adopts new inventions and tries to create

new fashions in order to increase his or her profits, but others can copy. So competition

maintains a proper profit balance. Thus technological unemployment arises when hew

machinery and inventions are adopted to replace manual labour.

5. Some laborers will always remain unemployed, because of the inefficiency of the

organization of the labour market and the inadaptability of managements and labour to


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changing circumstances. This frictional unemployment may be due to the absence of

proper contact between those who want work and those who want workers and to the

immobility of laborers between different occupations. Unemployment which refers to the

state of persons changing from one job to another or person who are Frictional

unemployment which refers to the state of persons who are waiting to be retrained for a

different occupation is quite compatible with full-employment.

6. High wages demanded by trade unions during a depression may result in

unemployment; employers may find it impossible to absorb the whole labour supply. in

other words, if the trade unions enforce a level of wages, which is not justified by the

marginal productivity of the laborers, unemployment must result because employers will

find it unprofitable to employ any new hands at an artificially high level maintained by

trade union pressure.

7. people are unemployed due to lack of investment opportunities because the current

demand for goods and services is not sufficient to absorb all available labour .people are

unemployed because investment and consumption expenditures are comparatively small.

You must be conscientiously seeking, but unable to find, full-time employment. If you are

receiving unemployment benefits that will automatically qualify you for the

unemployment deferment. When a previously employed worker is laid off or

involuntarily not in gainful employment, he or she is considered unemployed and

possibly eligible for certain state and federal compensation and benefits. No form is

required but you need to call your lender.

www.idapp.org/faqs/glossary.htm

The greatest work-related (Papalia & Wendkos 2001) stressor is sudden, unexpected loss

of a job. Research on unemployment since 1930s has linked it to mental and physical

illness and to problems in family functioning. when people are unemployed, two major

sources of stress are the loss of income and the effect of this loss on their feelings about

themselves workers who drive their identity from their work, men who define manhood as

supporting a family, and people who define their worth in terms of their works dollar


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value lose more than their paychecks when they lose their jobs. They lose a piece of

themselves and their self-esteem.

It is interesting to point (Sabur 1999) out that the least unemployment, 1.2% to 2.8%, is

found in the age group of 30-44 years, while the highest, 8.9%, is prevailing amongst theage group of 16-19 years see Table given below. It is, however, distressing to note that

8.6% of the senior citizens, 60 years and above, are also found unemployed. The

unemployment rate in this age group for women is as high as 26.4%. This clearly

indicates non-availability of formal social security and/or a source of livelihood for the

senior citizens, and the fast diminishing traditional social safety networks available earlier

in the form of families, kinships, friends and even local communities.

Unemployment Rate by Age and Sex as % 1999-2000

Age-group (years) Male Female

16-19 7.9 13.6

20-24 5.8 9.0

25-29 2.7 8.4

30-34 1.5 7.0

35-39 0.9 2.2

40-44 1.2 5.8

45-49 1.6 11.1

50-54 2.5 14.4

55-59 2.9 16.5

60 & above 6.6 26.4

Economic efficiency (Campbell 1999) requires, first, that available resources be actually

utilized in the production of goods and services rather than allowed to lie idle. An unused

locomotive is of zero efficiency. The same can be said for unemployed resources.

Unutilized resources-both human and property-obviously mean waste and inefficiency.


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Unemployment is the height of economic inefficiency; when society fails to put its

available resources into the productive process, it obviously realizes no output at all.

Long-term structural unemployment (Reynolds & Masters 1999) usually occurs because

the wage rate for a certain kind of labor (for example, dishwashers or steelworkers) is setabove the equilibrium level where demand is equal to supply. At a wage rate of Wo,

supply equals demand. At a higher wage, like Wi, supply exceeds demand. When the

wage is Wi, employment is Ei the number of Workers that firms are willing to employ

at this wage; but at Wi, Eii workers want such work. Eii Ei, the difference between the

supply and demand for labour at the going wage rate, represents structural unemployment.

Unemployment means lost output (McKenzie 1998) as well as personal hardship for those

who are out of work. Besides reducing output, unemployment triggers higher government

expenditures on unemployment compensation and welfare programs. Eventually those

expenditures are translated into higher taxes for the reduced working population-a

problem in itself.

Unemployment is nothing (Saeed 2003) but wastage of human resources. The non-

utilization of labour resources; the condition in which members of the labour force are

without jobs. Sometimes used more broadly to refer to the waste of resources when the

economy is operating at less than its full potential. The full employment is and has always

been desirable by the societies. The classical economists were of the view that full-

employment is always automatically achieved. This had been true if there would have

been perfect markets but it is not he case. Because of imperfections and government

intervention, the markets are disturbed. When the wage rate is determined by any factor

other than demand for and supply of labour the unemployment will exist in the economy.

At this moment government intervention is desirable to achieve the goal of full

employment.

Unemployment is defined as all persons (Labour Force Survey Pakistan 2003-04) ten

years of age and above who during the period under reference were, a) without work i.e.

were not in paid employment or self-employed, b) currently available for work i.e. were

available for paid employment self-employment and c) seeking work i.e. had taken


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specific steps in a specified period to seek paid employment or self-employment.

According to this definition, about 3.72 million people in the labour force were estimated

to be unemployed in 2004 compared to 3.65 million in 2003. The unemployed labour

force by urban/rural areas from 1995 to 2004 is given in the following table.

Unemployment Labour Force by Rural/Urban Areas (No. in Million)

Unemployment Labour Force Unemployment Rate (%)

Years Total Rural Urban Total Rural Urban

1995 1.84 1.14 0.72 5.37 4.80 6.90

1996 1.88 1.16 0.72 5.37 4.80 6.90

1997 2.29 1.47 0.82 6.12 5.65 7.17

1998 2.31 1.37 0.94 5.89 4.98 7.95

1999 2.36 1.40 0.96 5.89 4.98 7.95

2000 3.17 1.94 1.23 7.82 6.94 9.92

2001 3.24 1.94 1.27 7.82 6.94 9.92

2002 3.57 2.19 1.38 8.27 7.55 9.80

2003 3.65 2.23 1.42 8.27 7.55 9.80

2004 3.72 2.28 1.44 8.26 7.55 9.80

The state of being without work; a form of instability in an economy occurring when

aggregate supply exceeds aggregate demand or resulting from a variety of social,

locational, technological, and specific market factors

www.noacsc.org/auglaize/wk/cos/socialst/glossary.htm

Cyclical - workers gain and lose jobs according to the boom and bust cycles of the

economy. For example, the oil workers have lots of work when the price of oil is up;

when prices fall, workers are out of work. Frictional - usually for a short duration, people

who are between jobs by choice because the last job was unfulfilling, didn't pay enough,


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they wanted to change jobs or for other reasons. Seasonal - people not working due to

regular fluctuations in demand, e.g., crop harvesters are only in demand for part of the

year, and demand for construction work diminishes greatly in winter climates. Structural -

job vacancies that require different skills than the workers have, either due to a lack of

training or to geography. For example, a hockey player who can no longer play the game

and has no skills to match employer needs or, the need for tool-and-die makers is great in

Calgary but the unemployed tool-and-die makers are in Windsor.

www.ces.bc.ca/cg2001/GATEWAYS/PUBL/MCS_SITE/APPEND/APPENDB.HTM

Theoretical Framework


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A Theoretical Framework is a conceptual model of how one theorizes or makes logical

since of the relationships among the several factors that have been identified as important

to the problem. It is the foundation on which the entire research project is based. It is a

logically developed, described, and elaborated network of associations among the

variables deemed relevant to the problem situation and identified through such processes

as interviews, observations, and literature survey. Experience and intuition also guide in

developing the theoretical framework.

After analyzing the literature survey and the whole problem the following variables are

found that are considered as important for the topic i.e. Unemployment.

Technological Advancement

Investment

Seasonal Jobs

Immobility of Workers

Stress

Wastage of Human Resources

Wages

Booms in Economy

Slumps

Increase in Demands of Consumers

Depressions

Unemployment Allowances

Govt. Expenditures

Taxes

Skills

Self-Esteem

Number of Small Scale Industries

Loss of Job


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Loss of Income

Mental and Physical Illness

High Demands of Trade Unions

Privatization

Political Instability

Population

In the below paragraphs the variables are defined that how they are related to

unemployment.

Technological Advancement:

Whenever there will be technological advancements in any developing country like

Pakistan so it will always face unemployment. It is due to the fact that when advance

machinery comes so it can work instead of more than 10 workers. It means that

technological advancement is an independent variable and unemployment depends upon

it. Unemployment is direct proportionate to technological advancement because when

technology increases so it increases the unemployment.

Investment:

Investment activities are considered so vital for development. Whenever there will be

high investment in any country so it will generate employment and when reduce

unemployment. On the stated basis it can be said that there is inverse relationship between

investment and unemployment because when investment increases so it reduces that

unemployment.

Seasonal Jobs:


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It is observed by the researchers that wherever there are seasonal jobs so there will be

high unemployment. For example, in agrarian society where people are only busy on

cultivating their land so there people are seen unemployed after the harvesting process. It

means where there will be seasonal jobs so there will be more unemployment. Now it can

be said that there is direct relationship between seasonal jobs and unemployment because

increase in one leads to increase in the other variable.

Immobility of Workers:

In the developing countries like Pakistan there is collectivism and joint family system

which is hurdle for the mobility of workers. When workers do not go for work outside

their villages, towns, and cities so they will remain unemployed. It means that there is

direct relationship between unemployment and immobility of workers. Here

unemployment depends upon the mobility of workers.

Stress:

Stress is an unstable state of mind which is due to some bad event. Whenever a person is

get out of the work so he/she will always involve in stress. It means that unemployment

causes the stress. Here stress is dependent variable and unemployment is independent

variable. There is direct relationship between unemployment and stress.

Waste of Human Resources:

When people are without any work so it means that they are unutilized and lie idle. When

there will be unemployment so it means that there is waste of human resources. The

people are not used. Here direct relationship exists between the two variables.

Unemployment here is as independent variable and the other is dependent one.

Privatization:

Now a days the biggest threat to the employees is job security that is, due to privatization.

As most of public sector organizations are overloaded with employees so whenever such

public sector organizations are being privatized so they get out the employees which lead


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to unemployment. Therefore, privatization has direct link with unemployment as increase

in one leads to increase in the other.

Political Instability:

The impact of Political Instability on the economy can not be ignored by anyone. We can

see that the countries with political stability attract greater foreign investment as

compared to those with less political stability. The low investment leads to generate less

employment as a result there will be greater unemployment. So there is direct relationship

between political instability and unemployment.

Population:

Population is the number of people living in a specific geographical area. Whenever it is

high in any area so it means that there is greater number of hands for receiving any job.

The greater the number of job receivers the greater will be unemployed. It means that

there is direct relationship between population and unemployment.

Depression:

Depression means when there is few economic activities. It is a period when there is little

economic activities and many people are without any job. Whenever there is depression in

any country so it is seen that greater number of people are without job. It means there is

direct relationship between depression and unemployment. As one increases so the other

also increases.

Booms in Economy:

Booms in economy means that there is sudden increase in economic activities which

result in high investment and other positive economic activities. This situation leads theeconomy to generate more and more employment opportunities. It means that booms in

economy and unemployment are inverse proportionate to each others. Here booms in the

economy play the role of moderating variable between depression and unemployment.

Demands of Consumers:


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Sometimes there is sudden increase in the demands of consumers. It forces the

manufacturer to produce more and more products. Producing more goods require more

workers so the manufacturers hire more workers which leads to low unemployment. It

means that there is inverse relationship between increase demands of consumers and

unemployment. Here it is taken as Independent variable.

Slumps:

Slump is an economic term which means sudden fall in the demands of consumers due to

any reason. Whenever there is slump so it will disturb the relationship of increase

demands of consumers and unemployment. Slump is taken here as moderating variable.

Unemployment Allowances, Govt. Expenditure and Taxes:

Whenever there is high unemployment in any country so there Govt. gives unemployment

allowances to unemployed persons which increase the Govt. expenditures. Govt. recovers

its high expenditures by imposing taxes of different kinds. It means that when there is

high unemployment in any country so it will lead to high unemployment allowances

which lead to high Govt. expenditures and finally it increases the tax rates. Here

unemployment allowances and Govt. expenditure are taken as intervening variables, taxes

as dependent variable and unemployment as independent variable.

High Demands of Trade Unions and Wages:

Almost in every organization there are trade unions which claim to be the protector of

employees rights. They sometimes demands for higher wages from the employers. In this

case the employer increases the wages of employees but due to increase in the production

cost thereafter he/she gets out some employees. This increases the unemployment. It

means that there are direct relationships between high demands of trade unions for wages

and unemployment.

Loss of Job and Low Self-Esteem:

Whenever any person is having job so it is a pride for him/her. In this case he/she has

higher level of self-esteem. But when a person is suspended from the job so his/her self-


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esteem decreases. It means unemployment leads to loss of job and which leads to low

self-esteem. Here self-esteem is taken as dependent variable and loss of job plays the role

of intervening variable.

Lack of Skills:

In todays modern world almost every job requires any kind of skill. In societies where

there people do not have any skill so there will be greater unemployment. It means that

lack of skill is directly proportionate to unemployment. Here lack of skills is taken as

independent variable and unemployment as dependent variable.

Unemployment as Dependent Variable or Causes of

Unemployment:


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Below is the theoretical framework which shows that all independent variables are the

causes of unemployment.


21

Unem

ploym

ent

TechnologicalAdvancement

Immobility

of Workers

Lack of

Investment

Privatization

Political

Instability

Independent Variables

DependentVariable

Seasonal Jobs

Lack of Skills

Un

em

plo

ym

ent


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Unemployment as Independent Variable:

When any variable is taken as dependent variable so it shows that it is the effects of theindependent variable. Below are the dependent variables which are the effects of the

independent variable Unemployment.


22

Un

emp

loy

me

nt

Increase inPopulation

High Stress

Wastage ofHuman Resource

Mental andPhysical Illness

UnemploymentAllowances


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Some other Possible Independent, Dependent, and Moderating

Variables:


23

Independen

t Variable

Dependent

Variables

Decrease in

Demands

Unemployment

Decrease in

Productions

Depression

Booms inEconomy

Unemployment

Seasonal Jobs

Small ScaleIndustries

Unemployment


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The Complete Theoretical Framework


24

Unemployment

Allowances

Govt.Expenditur

e

High

Taxes

Unemploy

-ment

Unemploy-

mentLoss of Job

Low Self -Esteem

Unemploy-

mentLow income High Stress

Decrease

in demands

Technologi

cal

Advancement

Loss of

IncomeHigh Stress

Decrease

in

Production


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Hypothesis

A Hypothesis can be defined as a logically conjectured relationship between two or more

variables expressed in the form of a testable statement. It is considered as a testable


25

Depression

Immobility

of Workers

Demands

of Trade

Unions

Lack of

Investment

Seasonal

Jobs

Lack of

Skills

Privatizatio

n

PoliticalInstability

Unemploym

ent

Booms in

Economy

High

Wages

Small

ScaleIndustries

Wastage of

HumanResources

High Taxes

Govt.

Expenditure

Unemploy

ment

Allowances

Low Self

EsteemLoss of Job

Increase in

Population


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statement of the relationship among variables. Relationships are conjectured on the basis

of the network of associations established in the theoretical framework formulated for the

research study.

Null and Alternative Hypotheses:

The Null hypothesis is a proposition that states a definitive, exact relationship between

two variables. It is a statement which states that there is no (significant) relationship

between two variables or no (significant) difference between two groups.

On the other hand Alternative Hypothesis, which is the opposite of the null, is a statement

expressing a relationship between two variables or indicating differences between groups.

The hypothesis that has been developed from the above theoretical framework is given

below.

Hypotheses 1:If there is more investment then there will be less unemployment.

The above is a Hypotheses statement from which we have to make Null (Ho) and

Alternative (Hi) Hypotheses.

Ho = There is no relationship between the investment and unemployment.

Statistically we can write it as

Ho: r = 0

Where r denote the correlation between the investment and unemployment. Here r is

equal to zero so therefore we can say that there is no relationship between investment and

unemployment.

Hi = There is relationship between the investment and unemployment and when

investment increases so unemployment decreases.


Hi: r < 0 (because correlation is negative)

It means that the more is the investment the less will be unemployment.

Hypotheses 2:The greater the technological advancement the more will be

unemployment.


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Null Hypotheses for the H # 2:

Ho = There exist no relationships between technological advancement and

unemployment.


Ho: r = 0

Alternative Hypotheses for H # 2

Hi = There is relationship between the technological advancement and unemploymentbecause when technological advancement come to the unemployment increases.

Statistically it can be written as

Hi: r > 0 (correlation is positive)

It means that there is direct relationship between technological advancement and

unemployment because when one increases so it causes the other one to increase.

Hypotheses 3:There is a relationship between unemployment and an individual stress.

(Nondirectional hypotheses)

Null Hypotheses for H # 3

Ho = There is no relationship between unemployment and stress.

Ho: r = 0

Alternative hypotheses for H # 3

Hi = There is a relationship between the unemployment and stress.

Hi: r # 0

It means that there is relationship between unemployment and stress therefore r the

correlation is not equal to zero.

Hypotheses 4:The greater is the quality of education and skilled worker the lower will

be unemployment

Null Hypotheses for H # 4


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Ho = There is no relationship between unemployment and quality of education and skilled

workers.

Ho: r = 0

Alternative hypotheses for H # 4

Hi = There is relationship between unemployment and quality of education and skilled

workers.

Hi: r > 0

Hypotheses 5:If there is greater immobility of workers (workers are not moving for

getting jobs from one place to another and leaving their families) then there will be

greater unemployment

Null Hypotheses for H # 5:

Ho = There is no relationship between the immobility of workers and unemployment.

Ho: r = 0

Alternative Hypotheses for H # 5:

Hi = The greater the immobility of workers the more will be unemployment.

Hi: r > 0

Research Design

Research design is a series of rational decision-making where the purpose of the research,

type of investigation, extent of researcher interference, study setting, unit of analysis and

time horizon of research is identified.


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1. Purpose of the Study:

The Purpose of the research is to study the nature of the study whether it is exploratory,

descriptive, or hypothesis testing. It depends on the stage to which knowledge about the

research topic has advanced. In the discussing topic we are trying to know the cause and

effect relationship means that which variables increases the unemployment and which arethe consequences of unemployment. Whenever we want to know the relationship among

variables so it is said that this study is hypothesis testing. On this basis we can say that

this study of unemployment isHypothesis testing.

2. Type of Investigation:

There are two types of investigations 1). Causal, 2). Correlational.

The study in which the researcher wants to delineate the cause of one or more problem is

called a Causal study whereas when the researcher is interested in describing theimportant variables associated with the problem, the study is called Correlational study. In

case of our research about unemployment we are finding the all variables associated withit so therefore we can say that this study is a Correlational Study.

3. The Extent of Researcher Interference with the Study:

A Correlational study is conducted in the natural environment with minimum interferenceby the researcher. As our study is a Correlational study and we collect our data in the field

through questionnaire, interviews and literature survey therefore it can be said that this

study has not been manipulated by the researcher and there is Minimum interference by

the researcher.

4. Study Setting: Contrived and Noncontrived:

Research can be conducted in the natural environment where work proceed normally (that

is, in Noncontrived settings) or in artificial or contrived settings. Correlational studies areinvariably conducted in Noncontrived settings i.e. Natural Environment. We conducted

the research in the field. Now it can be said that this study being Correlational and Field

study is done inNoncontrived settings.

5. Unit of Analysis:

The unit of analysis refers to the level of aggregation of the data collected during thesubsequent data analysis stage. In case of our research the unit of analysis are Individual

and country. In our research process we collected our data from individuals and asking

them that what the causes of unemployment are. We also were concern about the overall


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position of the countrys employment. So on this basis we can say that in this research the

unit of analysis is Individual and country.

6. Time Horizon:

The researcher might want to study people or phenomena at more than one point in timein order to answer the research question. This is the case of longitudinal studies. When a

study is done in such a way that data are gathered just once, perhaps over a period of days

or weeks or months, in order to answer a research question. Such studies are called One-Shot or Cross-Sectional or Horizontal Studies. The research we have conducted is the

case of Cross-Sectional study because here we collected data just once over a period of

weeks.

MEASUREMENT OF VARIABLES

Measurement of the variables in the theoretical framework is an integral part of research

and an important aspect of research design. Unless the variables are measured in someway, we will not able to test our hypotheses and find answers to complex research issues.


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One technique to measure and define subjective variables like motivation, satisfaction,

unemployment etc. is to reduce these abstract notions or concepts to observable

characteristics and behaviors by those who possess these abstract qualities. This is donethrough Operational definition.

OPERATIONAL DEFINITION:

Operationalizing or operationally defining a concept so that it becomes measurable is

achieved by looking at the behavioral dimensions, facets, or properties denoted by theconcept, and categorizing these into observable and measurable elements.

In case of this research we are to define Unemployment operationally.

OPERATIONALIZING THE CONCEPT OF UNEMPLOYMENT:In the operational definition of unemployment we have divided it into followingdimensions and elements.

Dimension No.1 Health of EconomyIts the key indicator of the unemployment. Health of economy refers to the position and

growth of economy. If it is in strong position than it means that there will be more

employment and if it is in wake position than there will be low employment.

Dimension No.2 Low OpportunitiesIn any country when there is less opportunities so the people will be more unemployed.

There will be every less number of jobs for people.

Dimension No.3 Weak Industrial SectorUnemployment is also characterized by weak industrial sector. In most of the countrieswhere there is agrarian society strong so there are always seasonal jobs which results in

higher unemployment.

Dimension No.4 Instable Law and Order SituationIn any society when there is higher unemployment so there is always the problem of law

and order. People being not involved and employed will tend to go for illegal actions.Terrorism will be increasing as unemployed people will be the focus of terrorist groups

which will results in instable society.


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Operationalizing the Concept of Unemployment


Per Capita Income No Eligibility for

Job

Weak Industrial

Sector

LowOpportunities Instable Lawand Order

No. of dependent persons

on an individual

No. of people working in a family

No. of applicants

for a single job

Less No. of

new jobs

Low Productivity Working not

profitably

No. of

people

involve incrimes

No. of Robberies

and Theft

Lack ofEducation

and skills

Age problem

No. of closed

industries

Unemployment

C

E

D1 D3

D2D4

D5

E

E

E

E

EE

EE

E

E

Financial

Problem

Higher

DropoutRate

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Operationalizing the concept of Investment


Industrial Growth Low Living

StandardLower Education

Level

Les No. of new industrial

units establishment

Lower No. of people employed inindustry

Less No. of

GraduatesLow No. of Qualified

researchers

No. of people living

below poverty line

Lower income ofpeople

Lack of Investment

C

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Operationalizing the concept of Stress


Nervous Hesitate to take

ResponsibilityWork Under

pressure

Facial expressions and

gestures

Unable to stay calm

Increase in mistakes Unable to complete

work on time

Not Initiator

Fear of loss

Stress

C

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SAMPLING

The kind of sampling which we are using is convenience sampling (non probability). Wehave look out at our convenience for data collection means the people who have easilyaccess to us, we contact them and get the information. For this purpose we have

approached the students of QAU and Ministry of Labour and Manpower.

Students of QAU:Out of thirty questionnaires we filled up 15 from the university. This was done to get

responses from those who are going to be employed in the near future. So ascertainingtheir views were important. We filled these questionnaires in the Central Library of the

university. It was done so to get responses from all students irrespective of their

departments.

Ministry of Labour and Manpower:Fifteen questionnaires were filled up from the employees of Ministry of labour andmanpower. There we filled up these questionnaires in the following

departments/organizations of the ministry.

Institute of Manpower:

We filled some questionnaires from this institute which works under this ministry which

is near to Zero Point.

Overseas Pakistan Foundation for Manpower:This foundation also works under the same ministry. Here as well we filled up some of

the questionnaires.

Ministry of Labour and Manpower B Block:

We also filled up some questionnaires in the main building of the ministry.


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METHODS OF DATA COLLECTIONThere are several methods for data collection. We have used two methods for date

collection.

1. Interviews:

One method of collecting data is to interview respondents to obtain information on the

issues of interest. Interviews could be unstructured or structured, and conducted eitherface to face or by telephone or online. In case of this research we have conducted

unstructured face to face interviews. The following interviews were conducted for this

research which is summarized below.

a). The first interviewee was Mr. Waqar Ahmad, Section Officer in Overseas Pakistan

Foundation for Manpower. He said that unemployment is that condition where people arewilling to work but are not provided work. He said that people are usually looking for

White Coaler job rather than Blue Coaler jobs. He said that due to poor investment by the

natives and foreign investment unemployment has increased in Pakistan. He blames Govt.that due to no consistency in its policies unemployment has increased. He stressed on

political instability to be the cause of unemployment. He said that terrorism has led to

unemployment and vice verse. He said that Govt should give incentives to the investors so

that they can invest in the country without any fear and provide peaceful environment for

investment.

b). The second interview was taken by Mr. M. Shamim, Section Officer in OverseasPakistan Foundation for Manpower. He said that lack of quality education i.e. skills is the

main cause for unemployment. He also blames the Govt. to be responsible for

unemployment. He said stressed on the poor investment policies of the Govt. and said thatthey should be of improved one. He said that Govt. should maintain law and order

situation peaceful.

c). The third interview was taken from Mr. Azam, Assistant Director Institute ofManpower Ministry of Labour and Manpower. He defines unemployment as a situation

where jobs are less and people are able, willing and seeking for job. He said that due to noexpansion of economic sectors like agriculture, industry etc. unemployment has increased.He said that unemployment has led to intension and stress in the society. He said that

geographical location of any area has also contributed in the unemployment of that area.

He stressed of maintaining law and order for investment which can than lead that countryto increased employment opportunities.


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d). One of the interviews was taken from Mohammad Ali Khan, Research Officer

Ministry of Labour and Manpower B. Block. He said that the main cause of

unemployment is lack of investment and lack of skills. He said that people do investmentin foreign countries but not in their own country which has resulted in increased rate of

unemployment. Now what Govt has to do is to give incentives to investors and built

institutes for skill development in rural and urban areas. It has to educate the people sothat they become able to do any technical work on time. He said that terrorist act in the

country has also made in impossible for investors to invest their money. Now Govt has to

made liberal and investment developing policies so that people will invest in the country.

e). The fifth interview was taken by Mr. Syed Hasnat Staff Economist Economic

Department AERC. He said that due to structural problems. He defined structuralproblems as lack of quality education, infrastructural facilities etc. He said Frictional

unemployment is also one of the main causes for unemployment. He said that due to

dependency on one sector i.e. agriculture unemployment has increased. He said that small

scale industries must be established to promote employment. On one question he said thattrade union has no role in the promotion of employment. He said that privatization means

bringing efficiency so in case of privatization inefficient employees of get out of the

employment.

f). For the sixth interview we went to Economic Department of our own university i.e.

QAU and took interview from Mrs. Ferzana Naheed Khan, Lecturer. She definedunemployment as a condition that exist when people who are will to work but not able to

get jobs at reasonable wages. She blamed unskillness and illiteracy to be the main causes

of unemployment. She said that due to unemployment crimes and terrorist activities has

increased. She said that Govt. should bring continuity in her policies and provide facilitiesto those who are required to improve their skills. She said that privatization can not be

blamed for unemployment but she said that in short run it will reduce jobs but for long run

it is beneficent. She said that better infrastructure facilities should be provided to generateemployment opportunities in all around the country. She said that gender inequality is not

responsible for unemployment because if females are not allowed to work so then it does

not mean that it is unemployment. She said that international community should do morefor the reduction of unemployment in the developing countries.

2. Questionnaires:

The second source of our data collection was through Questionnaire. We filled up 30

questionnaire from which 15 was from students of QAU and 15 was from employees of

Ministry of Labour and Manpower, Institute of Manpower, Overseas Pakistan Foundationfor Manpower. The questionnaire was of the following pattern.

QUESTIONS

OPTIONSStrongly

Agree

(A)

Agree

(B)

Partially

(C)

Disagree

(D)

Strongly

Disagree

(E)


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1). Government is responsible

for unemployment.

2).Technological advancement

leads to unemployment.

3). Privatization increasesunemployment.

4). Lack of Skills in individual

has led to unemployment.

5). Trade Unions are responsible

for unemployment.

6). Demands for higher wages

has increased unemployment.

7). Immobility of workers leads

to unemployment.8). Political Instability increases

the unemployment.

9). Investment can decrease the

unemployment.

10).Unemployment persists due

to seasonal jobs.

11).Agrarian society has led to

unemployment.

12).Small scale industries can

decrease the unemployment.

13).Increasing Population has

led to unemployment.

14).Due to unemployment

people are involve in stress.

15). Unemployment leads to

wastage of human resources.

16).NGOs has greatly helped the

world to reduce the

unemployment.

17).Globalization will increase

unemployment in developing

countries.


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18).Infrastructure plays a vital

role in the reduction of

unemployment.

19).High Govt. Taxes has led to

unemployment.20).Unemployment is the result

of continuous economic

depression.

Data Analysis and Interpretation

The research questions for this research work were same for student and employees. Both

were given the same questionnaire for ascertaining the responses from them.

The responses from questionnaire can be summarized in the following way.


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QUESTION

NO.

FREQENCY OF RESPONSES

Strongly

Agree

Agree Partially Disagree Strongly

Disagree

1 13 13 4 0 0

2 3 7 3 10 83 2 5 11 10 3

4 14 12 1 2 1

5 1 8 6 9 6

6 4 8 6 9 3

7 7 5 14 4 0

8 11 8 5 6 0

9 20 3 3 4 0

10 1 7 15 6 0

11 2 5 5 16 2

12 9 14 5 2 0

13 20 6 1 3 014 16 7 4 3 0

15 12 9 7 2 0

16 3 7 18 2 0

17 10 8 5 5 2

18 16 6 8 0 0

19 14 9 6 1 0

20 12 18 0 0 0

The above are the frequency of responses from students and employees. Now we will

analyse the data with respond to our developed hypotheses.

The first Null Hypotheses which says that there is no relationship between investment and

unemployment will be rejected and the Alternative Hypotheses will be accepted. It is because of the responses about investment that 20 respondent strongly agree that

investment can decrease unemployment. So therefore we will accept the Alternative

Hypotheses.

The Second Null Hypotheses which is about Technological advancement and says that

there is no relationship between unemployment and it. Here the responses show that 18

disagree with the hypotheses that say technological advancement leads to unemployment.

Here we will accept the Null Hypotheses and reject the Alternative Hypotheses.The third Null hypothesis says that there is no relationship between unemployment and

stress. The collected data show that 23 respondents say that there is relationship betweenunemployment and stress and due to increase in unemployment, stress has increased. Here

we will accept the Alternative Hypotheses and reject the Null Hypotheses.


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In the fourth hypotheses we will again reject our Null hypotheses and accept the

Alternative one. Here the 26 respondents show agree ness that skill and education can

increase the employment and decrease the unemployment.

In the fifth hypotheses we will accept the Null Hypotheses and reject the Alternative

Hypotheses. It is because of the responses from the students and employees which saythat 18 have disagreed with the statement that Immobility of workers has led to

unemployment. Now we can say that immobility is not related to the unemployment.

From the informal interviews we also come to now that our culture of getting white coaler

job, increase in population, poor infrastructure which results in attracting low investment

that leads to generation of less employment, all these contribute to unemployment.

Recommendations and Suggestions :

Comprehensive economic planning is necessary for the best direction and

utilization of economic resources of the country, plus new avenues of employment

must be created.


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Comprehensive population control policies should be developed and implemented.

The best remedy for seasonal unemployment is the development of small scale

and cottage industries.

For fighting technological unemployment, attempts should be made to pass ontechnical training in them who are thrown out of employment due to technological

advancement.

Opportunities for investment may be created, since full employment depends on

effective demands which are made up of two items-investment and consumption

expenditure, private investment may be stimulated by the pursuit of a low interestrate policy or of a modified income tax policy.

Conclusion

The research paper which we have undertaken has focused on the issue of unemploymentand factors responsible for it. Our study was limited to the literature survey and

interviews. However an attempt was made to dig out the roots of the problem. It was

found that unemployment was much higher than the general impression provided by thegovernment. Unemployment has been the result of no consistent policies of the Govt. The


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frequent charging of govt. and adaptation of new policies by every new Govt. has led to

higher level of unemployment in the country. Political Instability is one of the major parts

of it that unemployment has increased due to it. Privatization in the short run may reduceemployment by downsizing the organization but in the long run it will benefit the country.

It will bring efficiency in the organization and organization will get prosperity.

Investment is the main factor which should be considered. The people should be givenincentives to invest their money. Now-a-days the native Pakistanis are investing in

different countries but not investing in Pakistan. They should be called for it. Foreign

investment should be given chance and liberal policies should make for foreign investors.Education level has to be improved and skilled development programmes has to be

launched. Govt. should make educational and skilled development programmes. For

temporary solution of unemployment unemployed individuals should be givenunemployment allowances which will reduce the tense and stress of individuals.

BIBLOGRAPHY

Azmat WazirPositive Approaches to Economics OCEAN Publisher D. I. Khan

Pakistan 2002, pp 63-69.

Kelvin Lancaster Introduction to Modern Microeconomics 6TH Ed. Rand

McNally and Co. Chicago U. S. A. 1999, pp 230-233.


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Munawar Shah (Sept. 2002) Unemployment in Pakistan Pakistan Management

Review pp 15-19.

Karamat Ali The Political Economy of Pakistan Publisher Vanguard, Pakistan

2002 pp 108-130.

Shachle An Economy Querist Brook Crutchley USA 1998 pp 77-82.

Khan, Ahfaque H. (2002) Factor demand in Pakistanis manufacturing,

International Economic journal. vol.2, no 3, autumn 2002.

National Manpower Commission (2001) report of the national manpower

commission, ISLAMABAD.

Hussain, Akmal (2000) sub committee on employment and poverty alleviation.

Committee on social and economic wellbeing for the 8th

five year plane.PIDE,Islamabad.

Naqvi, S, N H. (2004) social problems and economic scenario, committee on

social and economic wellbeing for the 8th five year plane.PIDE, Islamabad.

Papalier, Wendkrs Human Development 5th Ed. McGraw Hill Inc. U. S. A. 2002

pp 442-445.

Reynods Economics 3rd Ed. IRWIN-Dorsey U. S. A. 2003 pp 168-170

Richard Economics Houghton Mifflin Co. U. S. A. 1998 pp 125-128.

Compbill Economics 3rd Ed. MeGnnell Co. U.S.A. 1997 pp 27-30.

www.idapp.org/faqs/glossary.htm

www.wa.gov/ftp/esd/lmea/usergude/glossary.htm

www.noacsc.org/auglaize/wk/cos/socialst/glossary.htm

www.ces.bc.ca/cg2001/GATEWAYS/PUBL/MCS_SITE/APPEND/APPENDB.HTM

Interviewees Name and Contact No.

Mr. Waqar Ahmad

Section Officer, Overseas Pakistan Foundation for Manpower.

Ph. No # 9224267.


44
http://www.idapp.org/faqs/glossary.htmhttp://www.wa.gov/ftp/esd/lmea/usergude/glossary.htmhttp://www.noacsc.org/auglaize/wk/cos/socialst/glossary.htmhttp://www.ces.bc.ca/cg2001/GATEWAYS/PUBL/MCS_SITE/APPEND/APPENDB.HTMhttp://www.idapp.org/faqs/glossary.htmhttp://www.wa.gov/ftp/esd/lmea/usergude/glossary.htmhttp://www.noacsc.org/auglaize/wk/cos/socialst/glossary.htmhttp://www.ces.bc.ca/cg2001/GATEWAYS/PUBL/MCS_SITE/APPEND/APPENDB.HTM


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Mr. M. Shamim

Section Officer, Overseas Pakistan Foundation for Manpower

Ph. No. # 9204581

Mr. M. Azam

Assistant Director Institute of Manpower

Ph. No. # 9209676

M. Ali Khan

Research Officer Ministry of Labour and Manpower B. Block

Ph. No. # 03005193363

Mr. Syed Hasnat

Staff Economist AERC

Ph. No. # 03009153580

Mrs. Ferzana Naheed Khan

Lecturer Department of Economics QAU

Ph. No. # 2206692

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final project of rmrw unemployment

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