Journal of Applied Economics and Business Studies, Volume. 6, Issue 3 (2022) 23-44 https://doi.org/10.34260/jaebs.632 23 Journal of Applied Economics and Business Studies (JAEBS) Journal homepage: https://pepri.edu.pk/jaebs ISSN (Print): 2523-2614 ISSN (Online) 2663-693X Female Unemployment Duration in Pakistan – A Survival Analysis GulRukh Zahid1*1 & Ambreen Fatima 1 M.Phil Scholar, Applied Economics Research Centre (AERC), University of Karachi 2 Associate Professor, Applied Economics Research Centre (AERC), University of Karachi ABSTRACT Female unemployment in Pakistan is very high in contrast to its neighboring countries. The finding of previously available literature concludes that staying out of the labour market for longer durations causes a lower possibility of getting a job again and for females; the probability is even lower compared to males. This study examines the unemployment situation and its duration, forcing females to drop out of Pakistan's labour force. Numerous factors are accountable for the higher inactivity rate of females in the labour market. Some examples are low education level, higher age, home responsibilities such as taking care of elders and children, spouse job status, marital status, and non- availability of job-specific knowledge. Although in the case of Pakistan, literature shows many causes of higher inactivity of female unemployment, it does not focus on the time estimations and calculate it in days or months to figure out how long a female take to get back on a job once she becomes unemployed. More specifically, the aspects which determine unemployment are unavailable. Kaplan-Meier Survival analysis has been performed to assess the research by employing the data on the labour market and socio-economic variables from the Labour Force Survey (LFS) source of 2014-15. This study can help policymakers to figure out the duration of female unemployment, prevalent in the labour market for females in Pakistan. Keywords Female unemployment, Survival Analysis, Kaplan-Meier technique JEL Classification J64, J13, J16, P34 1 *gulrukhzahid@gmail.com GulRukh Zahid & Ambreen Fatima 24 1. Introduction One of the fascinating topics for academicians and policymakers is unemployment since it is one of the most distressing issues for developing and developed economies. Henceforth It is the favourite topic for labour economists, causing it the most debated matter among them as the strong spur on both micro-level as an influence of impacting the wellbeing of households and on the macro level, as it creates its impact on the aggregate level. The economic term differentiates the self-unemployed and unemployed by identifying that one who quit the job to stay at home to take care of young children or who does it for higher studies is not considered unemployed as they are not actively searching for a job. Numerous problems in society have the root cause of long-term unemployment. Survival for individuals becomes very difficult as many candidates contest for fewer positions. Social pressure and responsibilities make a person get into a severe depression when one fails to find any job, which ultimately pushes them to opt for any way possible to come out of that state. Unemployment is equally stressful for both males and females as they spend their life's quality time acquiring skills and education for a prosperous future. Unfortunately, they comprehend a vast gap between the opportunities offered and the people willing to get them when they enter the job market. Undoubtedly, it is the state's responsibility to take policy measures that create job opportunities and ultimately stimulate growth in the long run. Nevertheless, if the state fails to make employment in the economy, it provides foundations for many social problems. Pakistan is considered the 6th largest economy globally by its size and its working-age population, and the number count is growing every minute. The statistics taken from the World Bank data on development indicators reported that 65.3% was declared as the population under the working-age category for 2015, highlighting that most of its population consists of youth. The average unemployment rate was 5.46% from 1985 to 2015 and peaked in 2002 when unemployment reached 7.8%. Journal of Applied Economics and Business Studies, Volume. 6, Issue 3 (2022) 23-44 https://doi.org/10.34260/jaebs.632 25 Figure1: Female unemployment Source: Data taken from World Bank Unemployment among females in Pakistan is alarming because the female population is more in number than males in Pakistan. Following the role model of developed economies, it is high time to encourage the country's females to become part of the labour force. However, female labour force participation has increased over the years. Still, it is not as desired compared to Pakistan's neighbouring countries. Being a developing country, Pakistan should increase female participation in the labour force; it is being perceived that unemployment affects females differently than males, especially educated females. Moreover, the persistent increase of females in the labour force is cumulating, causing the gap to grow faster, impacting the current employment opportunities. In terms of new arrivals and limited job opportunities, the constantly extending labour market creates a massive gap between jobs and the available labor force. The continuous increase in unemployment with fresh arrivals in the form of new graduates entering into the labour market creates havoc and will be problematic in the long run. 0 1 2 3 4 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 4 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 Female Unemployment GulRukh Zahid & Ambreen Fatima 26 Figure 2: Female labour force participation in Pakistan Source: World Bank It is witnessed that in Pakistan, women stay at home, for which many factors are involved. The primary reason for others is that household responsibilities (child care is included in it) did not allow her to go out to work. Other than this, lower-wage compared to males are also the reason for lower labour force participation. Spouse job status is also among those causes which do not permit her as it is suggested not to work if husbands earnings are reasonable; these all only a few among all those issues which are responsible for limited participation of females in the labour market(Tasnim Khan et al. 2009 Ahmed et al. 2013, Shabir et al. 2015). However, according to the World Bank statistics, the women residing in rural areas of Pakistan have more share in the labour force than urban areas due to the higher rate of poverty. Another cause can be less educated, or people with no education are more adaptable and ready to work than highly qualified or have any education as they prefer to work according to their education. Different studies concluded that those with higher education chose to stay unemployed if they failed to acquire a job that matched their qualifications (Kahn et al., 2009). The pioneering work of Mincer (1962) and Cain (1966) on the economic analysis of the labour force participation of females received significant interest. Extensive female labour force participation improvement is observed in developing countries. A developing economy like Pakistan needs more of its females to join the labour force for the country's rapid growth. If the issue is not appropriately addressed, it will discourage females from pursuing higher education in the future. It is essential to understand the importance of examining the duration of unemployment at the individual level especially long-term unemployment, because it is the Journal of Applied Economics and Business Studies, Volume. 6, Issue 3 (2022) 23-44 https://doi.org/10.34260/jaebs.632 27 most significant factor which decides the life choices of individuals. Females living in a developing country like Pakistan let themselves deprives of many necessities due to the non- availability of disposable income at their end. The meaningful life activities and better livelihood require better income resources Tansel, A., & Taşçı, H. M. (2010). 1.1. Objective of the Study In order to estimate the unemployment duration among females Kaplan-Meier technique has been used. It is a nonparametric (actuarial) method for approximating time-related events (the survivorship function). Typically, A plot of the Kaplan-Meier estimate of the survival function is a sequence of horizontal steps of diminishing magnitude which, when a huge enough sample is taken, approaches the true survival function for that population. A significant advantage of the Kaplan-Meier curve is that the method can consider the "censored" data losses from the data before the final results are observed. Here, we are concerned to evaluate the duration of female unemployment, which is an enormous share of the dejected labour force. We can witness from the example of developed economies that they grew faster when they created equal opportunities for their female to play their part in society's wellbeing. The previously available literature has shed light on the fact that if good health amenities and equal chances of education are provided, it will increase its long-term growth. Specifically, the study will examine the role of age, education, gender, family size, children and other characteristics as determinants of unemployment duration. The paper is prearranged in the following manner: Section II shows the existing literature and highlights the critical factors related to the study—a review of the literature. The methodology part elaborates on the technique this study used for analysis purposes, the part after that debates the data sources; lastly, the study debated the study's findings by shedding light on the results and conclusion 2. Literature Review Numerous social, economic, and psychological factors are involved in female unemployment. It is high time for females of our society to get encouraged and participate in the labour force to improve their economic stability and the country. It is being observed that females are the neglected part of our culture being stayed at home; however, if given a chance to them, an enormous change in society can be bought, as they can perform on both home and workplace if given few facilities. Females quit their job after having children. It is one of the primary reasons that they stay at home because of the non-availability of help at home who can take care of their children in their absence. It was concluded in many studies that children under the age of 5 increase females' unemployment probability. This is the reason that they stay out of the labour market. Moreover, it was recommended that to resolve this issue, more GulRukh Zahid & Ambreen Fatima 28 childcare facilities will help counter this problem (Michele A. et al. (2011), N Lázaroet et al, (2000), Shabbir et al, 2015). In another study performed by Samer Kharif (2015) concludes that higher wage reservations and discriminatory labour market conditions are one of the causes of female's longer duration of unemployment. In Spain, the analysis was performed on the Household Expenditure Survey Data (1990- 91). The study utilizes the socio-economic variables and personal characteristics such as age, education, and family background and concludes that there is a need to create a resolution for a better family and professional life. Enormous individual-level data of Romania and Hungary was examined by Daniela et al.(2012) and highlighted the impact of socio-economic variables such as marital status, education, health status, age, region and unemployment allowance on employment status and unemployment duration for women and indicated that for women unemployment duration and age is a significant variable. Khan et al. (2009) determined that married women become an active part of the informal sector's labour force due to poverty. Doing so increases productivity and working mothers' income, reducing poverty at the household level in the long run. Anderson (1993) took a sample of about sixty working women and forty jobless women to examine Glasgow women's unemployment experience and summarized the importance of paid employment for women's social identity. The study also concluded that unemployment is a crucial factor in the loss of women's economic and social identity and at the domestic level, there is no reward for doing household chores by losing paid work. It was examined by Ahmed et al., (2013) on the data of rural and urban areas of Bahawalpur, Pakistan that the socio-economic variable like education, age, number of family members employed, education of father, mother, and husband, job status of the mother and technical education are the reason for lower employment rate in females. The study also summarizes that large family size, number of children, and joint family positively impact female unemployment. The study performed on India's labour force by Stephan (2013) evaluated that India's economy is not utilizing its large working-age population. If the same scenario persists, the propensity to incorporate female labour force participation in coming years will reduce further, which will cause India to fall in the growth rate if they do not include their educated females in the labour force. Pieters (2015) identified by incorporating the five extensive cross-sectional microdata for the period of 1989-2009 that higher education level, high growth rates and decline in fertility rate. The labour force participation of females is unchanged which is caused by market forces. The supply side's situation causes the main reason for such an immobile participation rate: household income, low-level selection of highly educated females, and the cultural feeling of dishonour for working females. Nonyana, Journal of Applied Economics and Business Studies, Volume. 6, Issue 3 (2022) 23-44 https://doi.org/10.34260/jaebs.632 29 Jeanette Zandile (2015) with the help of the survival technique, examine the semi-parametric and nonparametric estimates to understand the duration dependence and probabilities of exiting unemployment and the socio-demographic factors associated with it. Brigitte (2018) worked on Botosani County's labour market data. The information was taken from the Employment Agency of Botosani County between the time duration of 2012- to 2015 on the data set of 200 unemployment spells by applying Kaplan- Meier estimator to predict the probability of remaining unemployed with characteristics like age, cohort and gender. The findings revealed that variable cohort influences the probability of staying unemployed if gender and age were considered as controlled. By working on the data of the United States for the period of 2008 to 2015 Sansale (2019) evaluated the importance of an individual's personality and its role in determining the unemployment duration among young adults. The methodology that was used for that purpose was Competing Risk Model. It was estimated in the paper that individuals with more concern to their job status got a job as soon as they lost the previous one compared to those who have neuroticism. The data for the time 2000-01 was utilized by Taşçi et al. (2010) to evaluate the duration of unemployment for both men and women on Turkey's data. The study examines household and personal characteristics and their effect on the labour market state and concluded similarities in both developed and developing countries. It was stipulated that with higher education, such as having a university degree for females has no impact on unemployment, while for males, it positively impacts it. Msigwa. (2013) employ Multinomial logistic regression model (MLM) on the data of Tanzania to evaluate youth unemployment. The study results suggest that skills, education, geographical location, gender, and marital status significantly explain the difference in youth employment status in Tanzania. A Semi- parametric Cox regression approach was employed by Kavkler et al. (2009) to examine the duration of unemployment for five Central and Eastern European countries. The study utilizes the Cox proportional hazard model and Cox regression model with the inclusion of time- dependent. 3. Methodology This study focuses on unemployment duration using survival function; a nonparametric and parametric approaches. The nonparametric (actuarial) technique can handle the problem of censoring (both right and left). This is why, for duration analysis, the Kaplan-Meier approach, also known as product limit estimator, has been used. A breakthrough in medical science was witnessed, when Edward Kaplan and Paul Meier published their work in the Journal of American Statistical Association in June 1958. They evaluated that while GulRukh Zahid & Ambreen Fatima 30 performing a research trial, some patients may die while others survive at some stage. This motivates them to estimate the patient survival rate. They estimated the proportion of patients who survived at any point during the trial. Kaplan-Meier estimation is extensively used in recent years in other social science subjects as well. In economics, the technique is specifically used to research price and unemployment duration assessment by survival analysis. Numerous studies have estimated the duration analysis of unemployment by using a nonparametric technique such as Kaplan-Meier. Few of them are Flek al (2015), Vasilica, et al. (2011), Danacicaet al (2010), Gabriel et al. (2017), Ciucaet al (2010). The nonparametric method of estimating time-related events generally evaluates the survivorship function. It is commonly used to investigate the death as an outcome in biostatistics, but lately, this has become popular in industrial sciences and other social sciences. An economist might get interested in estimating the duration of people who remained unemployed. The sequence of horizontal steps of reducing magnitude in the Kaplan-Meier estimation of survival function presents the population's survival function in a huge sample. It approaches its real survival function for that specific population. It is assumed that the value of the survival function in the distant sample is constant. Due to its significant advantage of taking into account the "censored" data, Kaplan-Meier curve considers the lost data before the final results observed. The survival function "S(t)" starts with preliminary steps that captivate the probability of survival past time "t". It initiates with the steps before approximating the survival function "S(t)", which can evaluate the probability of survival time. For this study, "survival" means the period when an individual remains unemployed – i.e. before he/she gets re-employed. The time "t" is measured in days; S ̂(t)=∏_(j/j≤t) (u_j-a_j)/u_j (1) Here, we have taken u_j as the spells of unemployment ongoing in numbers for j days, while a_j are those spells (in numbers), change into the employment promptly after j days. We have considered the concept of hazard rate λ(t). For this study, hazard rate λ(t) represents the short probability of leaving unemployment and moving into employment at time t, and it is entirely dependable on the condition of remaining unemployed till the time of unemployed until immediately before t. The universal classification of a continuous hazard rate is; λ ̂(t)=lim┬(∆t→0)⁡〖(Pr⁡(t≤Tz Marital Status -.0809233 -1.11 0.266 Age -.0387243 -2.12 0.034 Square of age .0004067 1.71 0.086 Years of education .0193234 1.84 0.065 Percapita income 5.92e-07 1.13 0.259 Province Punjab .0194688 0.26 0.798 Sindh -.1493358 -1.54 0.123 Balochistan -.1414082 -1.07 0.285 Region .0483527 0.75 0.455 Head education -.0119239 -1.32 0.186 GulRukh Zahid & Ambreen Fatima 40 Traning .1253401 1.66 0.097 Migration -.0632756 -0.41 0.681 Table 5: Covariates Coefficients Exp(coefficients) P value Age (-3.87E-02) 0.962 0.034 Square of age (4.07E-04) 0.9999 0.086 Years of education (1.93E-02) 0.019 0.065 Training (1.25E-01) 1.133 0.097 Marital status (-8.09E-02) 0.922 0.0777 5. Conclusion and Policy Recommendations The study related to the unemployment duration of females in Pakistan was evaluated by employing Kaplan Maier and Cox regression to examine survival analysis for the extended unemployment of females in Pakistan, which results in the discouraging labour force in the long run due to the unavailability of job opportunities. For that purpose, the data is taken from the Labor Force Survey (LFS) 2014-15. The research concluded that a longer duration of female unemployment causes them hard to find a job again. The longer the duration, the fewer will be the chances to get employed again. The study concluded that the total time duration of re-entering into employment once being unemployed is 3650 days which is equal to 10 years, and this time is 121.67 months. It is concluded that the chances of remain unemployment duration increase, as the survival function decrease. The study determines that providing childcare will positively impact female labour force participation, as it is one reason females quit their jobs. This increased female labour force participation will help them to contribute to society by utilizing their talent. Therefore, it is highly recommended that for the better economic development of any country, it is imperative to engage females' participation in the labour force. For doing so, the following are some of the policy recommendations. The most important measure that the government should take on an immediate basis is increasing female child education investment. By doing so, labour force participation will increase as it has a positive impact on employment. In this regard, both print and electronic media should play their part. More incentives should be offered to bring out children into school, especially female children, as studies suggest that an educated mother always puts more effort to send her child to school. This research also suggests that females with a Master's Journal of Applied Economics and Business Studies, Volume. 6, Issue 3 (2022) 23-44 https://doi.org/10.34260/jaebs.632 41 degree or higher education faces a longer unemployment rate. To address this issue, the government should encourage private-sector employers to employ females in decision- making posts, and for the government-sector job, they should increase the female quota in jobs. It is also observed that females are the least priority for employers due to their respective household responsibilities and childcare. The government should provide economic childcare centres and rules to provide this facility to increase the number of females to work after having children. In our society, the socio-economic culture has created an environment that discourages females from working after marriage. We, as a society, work on this norm to be changed. 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