IMPACT OF GLOBALIZATION ON EMPLOYMENT SHIFTS IN PAKISTAN

This study has empirically investigated impact of globalization on employment shifts in labor market of Pakistan for the period 1991-2017. In two separate themes, the study empirically investigated the impact of globalization on employment shift in Pakistan based on sector and gender. Pakistan has experienced shifts in share of output and employment from agriculture sector to industry and services sectors. Agricultural share in employment decreased from 52.7 percent in 1980 to 37.5 percent in 2018. During the same period, the share of industry and services in employed labor increased to 24.5 percent and 38.6 percent, respectively. There are many factors responsible for sectoral shift in employment including globalization through trade, foreign direct investment and technology. Based on mixed order of integration of series in the models, Autoregressive Distributed Lag (ARDL) approach of cointegration was applied. The results indicated that sectoral shift in employment to services sector is positively affected by trade openness, foreign direct investment, literacy rate and share of services in GDP. The change in overall price level proxied by consumer price index and technology proxied by ICT affected sectoral shift in Pakistan negatively during the data period of the study. The results also showed that exports, ICT and real per capita GDP significantly reduced male to female employment ratio in Pakistan. Foreign direct investment and male to female wage difference positively affected gender based employment ratio. The overall conclusion of the study is that sectoral shift towards employment in services sector is triggered by trade openness and FDI in Pakistan. ICT is found helpful in reducing male to female employment ratio in Pakistan. On the basis of these findings, the policy makers may focus on compensating relatively disadvantageous nonservices sectors while promoting globalization through trade and FDI. Regarding gender based segregation, promoting ICT facilities for females may provide them fair opportunities in employment.