Why graduates face higher unemployment in Pakistan

It may sound counter-intuitive, but research shows the likelihood of unemployment in Pakistan grows in proportion to the level of education. A poorly developed labour market that’s unable to accommodate a rapidly growing number of educated workers has led to a high graduate unemployment rate. A recent research paper written by Henna Ahsan and Muhammad Jehangir Khan of the Pakistan Institute of Development Economics (PIDE), which uses employment data from 2001-02 to 2020-21, shows that the gap between the rate of overall unemployment (6.3 per cent) and that of graduates (16.1pc) is almost 10-percentage-point wide. There’re both supply- and demand-side reasons for such a substantial difference between the two rates of unemployment, according to the PIDE economists. After staying relatively flat for decades, the number of universities grew manifold in a short span as the University Grant Commission was replaced with the Higher Education Commission in 2002. As a result, enrolment in universities grew at twice the rate of enrolment growth at other levels of education.