Youth Unemployment in Pakistan: What the Latest Labour Force Survey Reveals, and What Must Change

Analysis · Youth Employment

Pakistan’s youth bulge is often described as a demographic dividend. The latest labour data suggest that dividend is not being collected. The policies to change that now exist; what matters next is whether they are judged by the jobs they create.

By Rizwan Anwar · Special Representative, Prime Minister’s Youth Programme · 1 November 2026 · 9-minute read

Around two-thirds of Pakistan’s population is under 30. Few countries carry such a concentration of young energy, and few face a starker choice about what to do with it. Every year, millions more young people reach working age. Whether they find productive work will shape Pakistan’s economy, politics and social stability for a generation.

The Labour Force Survey 2024–25, released by the Pakistan Bureau of Statistics in late 2025, is the most complete picture we have of how that choice is playing out. Its headline is sobering. The national unemployment rate rose to 7.1%, and about one in eight young people aged 15 to 24 who want work cannot find it. Behind the averages lie three patterns that matter more than the headline: education is not reliably converting into jobs, most young women remain outside the labour market altogether, and most work available to young people is informal.

Read the headline numbers carefully

Before drawing conclusions, one caveat. The 2024–25 survey adopted the International Labour Organization’s updated definitions of work and unemployment, the standards agreed at the 19th International Conference of Labour Statisticians. Pakistani officials warned in advance that the change would, by itself, push the measured unemployment rate up and participation rates down. Part of the increase since 2020–21 is therefore statistical rather than real, and precise year-on-year comparisons should be treated with care.

The direction of travel, however, is not in doubt. Pakistan’s labour force grew from about 72 million to more than 83 million in four years, an increase of roughly three million people a year. An economy growing slowly cannot absorb entrants at that pace. The result is not only open unemployment but a large pool of young people who are underemployed, working in low-productivity jobs, or not seeking work at all.

Three patterns behind the averages

1. Education is not reliably converting into employment

In most economies, more education means less unemployment. In Pakistan the relationship is weaker. Degree holders face an unemployment rate of 10.9%, well above the national average, and graduates make up 14.8% of the unemployed compared with 8.9% of the employed. The signal is uncomfortable but clear: a significant share of what young people study does not match what employers are hiring for, and the transition from campus to career is poorly supported.

2. Young women are the largest untapped resource

Only about a quarter of working-age women participate in the labour force, against more than two-thirds of men. Those who do face higher unemployment: 10.5% for women overall, and 23.9% for women with a degree or more. That last figure deserves particular attention. Families and the state invest heavily in educating young women, and nearly one in four of those who seek work with a degree cannot find it. No policy aimed at youth employment can succeed without addressing this gap.

3. Most work is informal, and digital work is emerging

Nearly three-quarters of non-agricultural jobs are informal, without contracts, social protection or reliable progression. For the first time, the survey also measured gig work: 2.9% of workers rely on it as their main job, and 10.6% as a secondary source of income, rising to 15% among women with second jobs. Digital and platform work is no longer marginal. It is becoming a significant, if unprotected, part of how young Pakistanis earn.

The policy response: the architecture now exists

The past year has brought the most comprehensive youth policy framework Pakistan has had. On 12 August 2026 the Prime Minister launched the country’s first National Youth Employment Policy. The federal cabinet has approved a National Adolescent and Youth Policy that, for the first time, treats everyone aged 10 to 29 within a single framework. The government has also committed to conducting the Labour Force Survey annually rather than every few years, which will make it possible to track progress in something close to real time.

Delivery channels are in place too. The Prime Minister’s Digital Youth Hub passed 800,000 registered users in June 2026. NAVTTC’s Prime Minister’s Youth Skills Development Programme began training its third batch in February 2026. The PM Youth Business & Agriculture Loan Scheme offers credit at 0% to 7% markup through 15 banks. The question is no longer whether Pakistan has youth programmes. It is whether those programmes are designed, measured and improved around one outcome: young people in decent, productive work.

Five priorities for the next phase

Measure jobs, not enrolments

Programmes are too often reported by inputs: people trained, laptops distributed, loans disbursed. These matter, but the test that counts is what happens next. Every major youth programme should publish employment or business-survival outcomes six and twelve months after participation. The move to an annual labour survey makes this practical; the agreement between PMYP and SMEDA to analyse why loan applications are rejected is exactly the kind of outcome-focused learning that should become standard.

Let employers shape the skills agenda

The graduate unemployment figures point to a supply of skills that does not match demand. Industry-led training, in which employers help design curricula and commit to interviewing graduates, consistently outperforms supply-driven courses. Expanding such partnerships within the skills programme, and rewarding training providers for placements rather than completions, would sharpen incentives across the system.

Design for young women from the start

Quotas and targets are useful, but participation depends on practical conditions: safe transport, childcare, flexible and remote work, and workplaces where women are welcome. Programmes should be designed around these constraints rather than retrofitted to them. Digital work, where women already form a growing share of secondary earners, is a natural place to begin.

Recognise and protect digital work

With more than one in ten workers earning some income from gig work, the digital economy is already a youth employment programme in its own right. It needs the basics of any functioning labour market: reliable international payment channels, simple registration and tax treatment, access to social protection, and continuous upskilling as platforms and artificial intelligence change what clients will pay for.

Connect finance to readiness

Affordable credit can turn jobseekers into job creators, but only when it reaches viable businesses. Pairing loans with business-planning support, mentoring and market access, sequenced so that young entrepreneurs learn, test and then borrow, would raise both approval rates and survival rates. The same principle applies to international pathways: overseas employment financing works best when it is linked to recognised skills certification.

What young people can do now

• Register on the Digital Youth Hub at pmyp.gov.pk to see skills, loan and laptop opportunities in one place.
• Choose training by demand, not by fashion. Look at job listings in your city before selecting a course through NAVTTC, and prefer courses with industry partners.
• Build evidence of skill. A portfolio, a certified qualification or a track record of freelance projects often matters more to employers and clients than a transcript.
• If you plan to start a business, read our guide to the PM Youth Loan Scheme and prepare a realistic plan before you apply.

Conclusion: a dividend is earned, not inherited

A young population does not automatically produce a demographic dividend. It produces one only when young people move into productive work faster than they enter the labour market. Pakistan now has the policy architecture, the delivery platforms and, with an annual labour survey, the means to measure what is working. The next step is discipline: to expand what demonstrably creates jobs, to fix or close what does not, and to treat every young Pakistani, especially every young woman, as a participant in the economy rather than a beneficiary of it. That is the difference between a youth bulge and a youth dividend.

Sources

1. Pakistan Bureau of Statistics, Labour Force Survey 2024–25, Annual Report, and Key Insights.
2. Geo News, Pakistan’s unemployment rate rises to 7.1%: survey (education and gender breakdowns).
3. Asia News Network/Dawn, Pakistan’s unemployed population surged by 1.4m in 4 years (participation, informality and gig work).
4. Profit, Unemployment rate rises to around 7% under updated labour survey (methodology change).
5. Radio Pakistan, PM launches first-ever National Youth Employment Policy, 12 August 2026.
6. Press Information Department, PR No. 101: annual Labour Force Survey commitment, 12 May 2026.
7. The Express Tribune, Youth policy to unlock demographic dividend, 8 September 2026.
8. Press Information Department, Digital Youth Hub passes 800,000 users, 23 June 2026.
9. The News, NAVTTC begins 3rd batch of PM’s youth skills program, 24 February 2026.