Between independence and the early 1990s, the labor force grew rapidly, reflecting the high population growth and the subsequently burgeoning proportion of the population under twenty years of age. The data available concerning employment are only estimates because few concrete facts are available. Official labor force figures represent orders of magnitude and are not precise. Observers agree, however, that relatively few women participate in the formal nonagricultural labor force.

In FY 1992, the civilian labor force was estimated at 33.8 million, compared with 26.3 million in FY 1982 and only 10.4 million in 1951 (see table 9, Appendix). In FY 1993, about 48 percent of the civilian labor force was engaged in agriculture, 13 percent in industry, 7 percent in construction, 13 percent in trade, 5 percent in transportation and communications, and 14 percent in other services. Only about 25 percent of the official labor force are wage earners, which reflects the high levels of casual enterprise, family businesses, and self-employment.

Agricultural employment, although increasing, has expanded at a slower rate than the total labor force for most of the period since independence. In the 1960s and 1970s, owners of mid-sized farms turned increasingly to managing their own holdings, displacing former tenants. Increased mechanization displaced agricultural laborers. Industry, the major growth sector of the economy, was unable to absorb sufficient workers. From the early 1960s until the early 1990s, the proportion of the labor force employed in the industrial sector remained steady, while the proportion working in trade, construction, and transportation rose. Official estimates placed unemployment at around 3 percent in the late 1980s, but this rate rose in the early 1990s to around 6 percent. Underemployment is a greater problem and is particularly evident in agriculture, construction, and trade.

Overseas employment partially compensates for the insufficient job market. Since the mid-1970s, a growing number of Pakistanis, mostly men, have gone to labor-deficient, oil-exporting countries in the Middle East, where wages are much higher than at home. Estimates vary on the number of Pakistanis working overseas. In the early 1990s, some observers put the number of Pakistanis working in the Middle East as high as 4 million. These workers range from unskilled laborers to highly skilled professionals such as engineers, accountants, teachers, physicians, and nurses.

In the early 1990s, Pakistanis sent home remittances of between US$1.5 billion and US$2.0 billion a year, or over 30 percent of Pakistan's foreign-currency earnings and almost 5 percent of GNP. These remittances raise domestic purchasing power significantly. After the mid-1970s, wages of skilled and unskilled workers in Pakistan rose substantially, affected to a considerable degree by the competition for workers from abroad.

Data as of April 1994