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Unemployment refers to a situation when people aren t engage in any type of employment. In Pakistan Economic Survey 2005-06, the unemployment was defined as the part of the population who are of at least 10 years of age and are without any work, not being paid for their work and seeking employment. The unemployment rate in year 2007 was 6.5% .

Classification of Unemployment
1. Seasonal Unemployment People who get job in a specific season like workers in cotton factory are employed in cotton season only. 2. Disguised Unemployment When people are not being utilized properly it s known as disguised unemployment. For example, on a piece of land two farmers are required but 4 or 5 doing the job. 3. Industrial Unemployment 4. Educated Unemployment

Causes of Unemployment
1. Population Growth Rate The rapid increase in population is a major cause of unemployment. The population is increasing at a fast pace but the employment opportunities are limited. 2. Division of Labor Labor in different sectors of economy is not properly distributed. In agriculture sector there is more unemployment. 3. Mechanization Due to machines the works are being done mechanically that is also one of major causes of unemployment. Large number people have loose their jobs due to machines. 4. Technology The advance technology has made it easier to work with few people, now the industries have latest technology with the very few individuals. It also leads to unemployment.

5. Migration to Urban Areas People in rural areas migrate to urban areas for better life style, but they hardly get proper jobs. The people living per city are increasing but the employment opportunities are limited. 6. Political Instability The political instability is also a cause for unemployment. The government is not able to provide adequate facilities to the people; they aren t generating the required employment opportunities. 7. Sick Industries Due to unwanted situations the industries are converting into sick units. These are the units that are not working at all or up to the required outcome. 8. Vocational & Technical Education In Pakistan, the technical education is constantly deprived. The people prefer to go for academics but not vocational training.

Policies to Reduce Unemployment

1. Control Population The government needs to take measures to control the population not for unemployment but for overall development of country. 2. Establishment of Industries New industries must be established specially in backward areas. 3. Attention to Cottage Industry Cottage industry is the key of the ex ports of any country. It can provide employment opportunities for plenty of artisans. 4. Focus on SMEs The small and medium enterprises are also part of the economy; if they will grow they are going to produce employment opportunities. 5. Self Employment Schemes It is a scheme for educated unemployed individuals like YIPS (Youth Investment Promotion Society). 6. Build Infra structure The government should spend on building infrastructure like Roads, Damns, and Schools etc 7. Manufacture goods locally There is need to manufacture goods locally, it can provide us with employment and reduce the import cost.

8. Encourage Agriculture sector The agriculture sector is backbone of Pakistan economy. We need to encourage farmers so more people can be utilized in agro-sector. 9. Review the Labor Policy The government needs to review the labor policy. Favorable policies need to be made to reduce unemployment. 10. Micro Financing Micro financing is to give loans on small level; it can be effective way to involve people in s mall businesses and help them to stand themselves . 11. Suitable Monetary and Fiscal Policies The monetary and fiscal policies have impact on the economy of the country. And favorable policies encourage businesses and expand the industries so producing more opportunities for employment.

The Above mentioned policies are some of the steps which can be taken to reduce unemployment. It is known that unemployment can t be eliminated but it can be reduced to an extent where it doe sn t affect the economy.