The present paper discuss the nature of structural changes in
employment to understand jobless growth in Pakistan for the period
spanning over 1967-2008. In our work (elsewhere)1 analysing Pakistan at
sectoral level to find underlying factors generating jobless growth, we
found that Jobless growth in manufacturing sector was anticipated.
Industrial sector has a significant importance in any economy across the
glob. Recent changes in the use of capital—based foreign technology has
resulted in substitution of labour with non-labour inputs such as
capital. Employment shifts between industrial sectors are often
witnessed as indicators of Structural change in an economy. In this
paper we are more interested in the nature of structural change that
took place in Pakistan economy over 1967-2008. We set to analyse four
commonly used measures of sectoral reallocation proposed by Lilien
(1982), Groshen and Potter (2003), Rissman (1997), and Aaronson, Rissman
and Sullivan (2004). Findings of our work are suggesting that the
economy of Pakistan underwent structural change during periods of
recession and recovery. However, it does appear that structural changes
were more pronounced at the time of 1969 recession than that of 1991
recession. A plausible explanation for this result might be significant
shifts in employment from agriculture towards services sectors. We
conclude, based on the evidence from our study, that sectoral
reallocation is one of the major causes of jobless growth in
Pakistan.
Can Sectoral Re-allocation Explain the Jobless Growth? Empirical
Evidence from Pakistan