Population and Unemployment: A Dilemma to Resolve

The objective of this paper is to explore the determinants of unemployment in Pakistan. A model is developed to quantify the statistical relationship between unemployment- population and gross domestic product. It is hypothesized that population and GDP exert a strong impact on unemployment in the economy of Pakistan. A positive relationship is assumed to hold between unemployment and population. GDP is supposed to have a negative relationship with unemployment A period of 13 years is 5elected covering the 1986-1999 era. A simple regression is run to obtain the results. Highly significant results are obtained. On the basis of our results, it could be argued that population pressure can erode employment opportunities and a high growth rate in GDP can bring about a decline in unemployment rate. In order to minimize the unemployment problem, two measures maybe taken. First, a strict population policy maybe introduced. Second, a high rate of GDP could be targeted to generate employment opportunities in the economy.