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

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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 accept employment 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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Research on Unemployment Rural-Urban Labour Force Labour Force Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 (E) 2004 (E)
E=Estimated

Rural Million No 23.96 24.27 26.02 27.57 28.11 27.96 28.44 28.98 29.59 30.19 % Share 70.09 69.32 69.46 70.24 70.00 68.95 68.71 67.05 67.05 67.03 Million No 10.22 10.74 11.44 11.68 12.05 12.59 12.95 14.24 14.54 14.85

Urban % Share 29.90 30.68 30.54 29.76 30.00 31.05 31.29 32.95 32.95 32.97

Million No 34.18 35.01 37.46 39.25 40.16 40.55 41.39 43.22 44.13 45.04

Annual Growth 2.43 7.0 4.78 2.32 0.97 2.07 4.42 2.00 2.06

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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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 Research Methodology and Report Writing

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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 Research Methodology and Report Writing

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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 Research Methodology and Report Writing

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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 the age 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) 16-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60 & above Male 7.9 5.8 2.7 1.5 0.9 1.2 1.6 2.5 2.9 6.6 Female 13.6 9.0 8.4 7.0 2.2 5.8 11.1 14.4 16.5 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 set above 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 nonutilization 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 fullemployment 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 Years 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Total 1.84 1.88 2.29 2.31 2.36 3.17 3.24 3.57 3.65 3.72 Rural 1.14 1.16 1.47 1.37 1.40 1.94 1.94 2.19 2.23 2.28 Urban 0.72 0.72 0.82 0.94 0.96 1.23 1.27 1.38 1.42 1.44 Total 5.37 5.37 6.12 5.89 5.89 7.82 7.82 8.27 8.27 8.26

Unemployment Rate (%) Rural 4.80 4.80 5.65 4.98 4.98 6.94 6.94 7.55 7.55 7.55 Urban 6.90 6.90 7.17 7.95 7.95 9.92 9.92 9.80 9.80 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 Research Methodology and Report Writing

Research on Unemployment Loss of Income Mental and Physical Illness High Demands of Trade Unions Privatization Political Instability Population

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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 the economy 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 selfResearch Methodology and Report Writing

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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 Unemployment:

as

Dependent

Variable

or

Causes

of

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Below is the theoretical framework which shows that all independent variables are the causes of unemployment.

Technological Advancement

Unemployment

Immobility of Workers

Lack of Investment

Privatization

Political Instability

Independen t Variables

Dependent Variable

Unemployment

Seasonal Jobs

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Increase in Population

Unemployment as Independent Variable:

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

High Stress

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Unemployment

Wastage of Human Resource

Mental and Physical Illness

Unemployment Allowances

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Independen t Variable

Dependent Variables

Some other Possible Independent, Dependent, and Moderating Variables:

Decrease in Demands

Decrease in Productions

Unemploymen t

Depression

Unemployment

Booms in Economy

Seasonal Jobs

Unemployment

Small Scale Industries Research Methodology and Report Writing

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Unemploy -ment

Unemployment Allowances

Govt. Expenditur e

High Taxes

Unemployment

Loss of Job

Low Self Esteem

Unemployment

Low income

High Stress

The Complete Theoretical Framework

Decrease in demands Decrease in Production

Technologi cal Advancem ent

Loss of Income

High Stress

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Depression Booms in Economy Immobility of Workers Low Self Esteem

Loss of Job

Demands of Trade Unions

High Wages

Unemploym ent

Wastage of Human Resources

Lack of Investment

Seasonal Jobs Small Scale Industries Lack of Skills

Unemploy ment Allowance s

Govt. Expenditur e

High Taxes

Privatizatio n

Political Instability

Increase in Population

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 Research Methodology and Report Writing

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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. Statistically we can write it as 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. Statistically we can write it as Ho: r = 0 Alternative Hypotheses for H # 2 Hi = There is relationship between the technological advancement and unemployment because 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 are the 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 is Hypothesis 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 the important 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 with it 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 interference by 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 are invariably 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 in Noncontrived settings.

5. Unit of Analysis:
The unit of analysis refers to the level of aggregation of the data collected during the subsequent 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 time in 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 OneShot 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 some way, we will not able to test our hypotheses and find answers to complex research issues. Research Methodology and Report Writing

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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 done through 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 the concept, 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 following dimensions and elements.

Dimension No.1 Health of Economy

Its 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 Opportunities

In 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 Sector

Unemployment is also characterized by weak industrial sector. In most of the countries where there is agrarian society strong so there are always seasonal jobs which results in higher unemployment.

Dimension No.4 Instable Law and Order Situation

In 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

C

Unemployment
D1 D3 D5

Per Capita Income

D2

Weak Industrial Sector

D4

No Eligibility for Job Instable Law and Order

Low Opportunities
E Less No. of new jobs E

E No. of applicants for a single job

E No. of Robberies and Theft No. of people involve in crimes

E Low Productivity E No. of dependent persons on an individual Working not profitably E No. of closed industries

E Lack of Education and skills

E No. of people working in a family Financial Problem Higher Dropout Rate

E Age problem

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Operationalizing the concept of Investment

C

Lack of Investment

Industrial Growth

Lower Education Level

Low Living Standard

Less No. of Graduates

Low No. of Qualified researchers

Les No. of new industrial units establishment

No. of people living below poverty line

Lower No. of people employed in industry

Lower income of people

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Operationalizing the concept of Stress

C

Stress

Nervous

Work Under pressure

Hesitate to take Responsibility

Increase in mistakes

Unable to complete work on time

Facial expressions and gestures

Not Initiator

Fear of loss Unable to stay calm

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SAMPLING
The kind of sampling which we are using is convenience sampling (non probability). We have look out at our convenience for data collection means the people who have easily access 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 ascertaining their 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 and manpower. 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 COLLECTION

There 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 either face 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 are willing 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 Overseas Pakistan 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 that they 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 of Manpower 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 no expansion 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 country to 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 investment in 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 so that 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 structural problems 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 that trade 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 defined unemployment 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 facilities to 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 generate employment 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 more for 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 Foundation for Manpower. The questionnaire was of the following pattern.

OPTIONS QUESTIONS
Strongly Agree Agree (A) Research Methodology and Report Writing (B) (C) (D) Partially Disagree Strongly Disagree (E)

Research on Unemployment 1). Government is responsible for unemployment. 2).Technological advancement leads to unemployment. 3). Privatization increases unemployment. 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 countries. in developing

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Research on Unemployment 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.

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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.

Research Methodology and Report Writing

Research on Unemployment FREQENCY OF RESPONSES QUESTION NO. Strongly Agree 1 13 2 3 3 2 4 14 5 1 6 4 7 7 8 11 9 20 10 1 11 2 12 9 13 20 14 16 15 12 16 3 17 10 18 16 19 14 20 12 Agree 13 7 5 12 8 8 5 8 3 7 5 14 6 7 9 7 8 6 9 18 Partially 4 3 11 1 6 6 14 5 3 15 5 5 1 4 7 18 5 8 6 0 Disagree 0 10 10 2 9 9 4 6 4 6 16 2 3 3 2 2 5 0 1 0 Strongly Disagree 0 8 3 1 6 3 0 0 0 0 2 0 0 0 0 0 2 0 0 0

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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 between unemployment 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 say that 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 on technical 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 interest rate policy or of a modified income tax policy.

Conclusion
The research paper which we have undertaken has focused on the issue of unemployment and 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 the government. 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 reduce employment 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 given incentives 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 given unemployment 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 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

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

Interviewees Name and Contact No.

Mr. Waqar Ahmad Section Officer, Overseas Pakistan Foundation for Manpower. Ph. No # 9224267.

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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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