Pakistan’s unemployment rate is expected to climb to nearly 7 percent in the latest Labour Force Survey (LFS) 2024–25, rising from 6.3 percent recorded in the 2021–22 survey, according to preliminary findings shared by the Pakistan Bureau of Statistics (PBS). The federal government is set to officially release the updated survey next week.
According to media reports, the initial estimates were presented at a recent “Data Fest” conference, where PBS unveiled early observations from the 2024–25 LFS. However, experts raised concerns regarding certain figures, particularly those related to the Islamabad Capital Territory (ICT) and a few other sectors. PBS Chief Statistician was approached for comment but did not respond until the filing of the report.
The earlier 2021–22 LFS had placed Pakistan’s labour force at 71.76 million, with unemployment slightly easing to 6.3 percent. The employment-to-population ratio stood at 42.1 percent, reflecting a sharp gender gap — 64.1 percent for men and 19.4 percent for women. The services sector remained the country’s largest employer, while youth unemployment (ages 15–24) touched 11.1 percent, particularly high among young women.
Officials say the latest rise in unemployment is closely linked to a major methodological shift. The 2024–25 survey adopts the 19th International Conference of Labour Statisticians (ICLS) standards, introduced by the International Labour Organization (ILO). The previous LFS was based on the 13th ICLS definition from 1982, which classified anyone working even one hour during the reference week — whether for wages, profit, or in a family business — as “employed.”
Under the 19th ICLS system, work is now categorised more precisely into market work (carried out for wages or profit) and own-use production work, which includes producing crops or livestock for household consumption, volunteer work, unpaid training, and other non-market activities. Individuals involved solely in such non-market activities will no longer be counted as employed unless they are actively seeking or available for a paid job.
This shift is expected to significantly reshape Pakistan’s labour statistics. Experts anticipate a decline in labour force participation and employment rates, while unemployment rates will appear higher — not necessarily because labour market conditions have worsened, but due to the exclusion of unpaid family workers and subsistence farmers from the “employed” category. Many of these individuals, including large numbers of rural women, will now be classified as own-use production workers or placed outside the labour force entirely.
According to officials familiar with the process, the updated classification aims to better reflect “actual economic activity” — defined strictly as work performed in exchange for compensation — and provide a clearer picture of who is genuinely part of the labour market.
