The Utilisation of Education and Skills: Non-Pecuniary Consequences Among Graduates

In this study, an attempt has been made to estimate the incidences of the job mismatch and its determinants in Pakistan. This study has divided the job mismatch into three categories: qualification-job mismatch, skill mismatch and field of study mismatch. The primary dataset has been used in which employed graduates of the formal sector have been targeted. The paper has also measured the qualification-job mismatch by three approaches, and found that about one-third of the graduates have been facing qualification-job mismatch. Similarly, more than one-fourth of the graduates are mismatched in skills, about half of them are over-skilled and the rest are under-skilled. The analysis also shows that 11.3 percent of the graduates have irrelevant, and 13.8 percent have slightly relevant jobs to their field of study. The analysis reveals that over-qualified and over-skilled graduates are less satisfied, while under-qualified and under-skilled graduates are more satisfied with their current jobs. A similar situation has been observed in case of the field of study mismatch, where both the moderate and complete fields of study matched graduates are more satisfied than the mismatched ones. The job search behaviour is positively associated with the level of education. Over-qualification has a positive impact, while under-qualification has a negative effect to search for another job. A good match between field of study and current job reduces the likelihood of intention to quit the job. JEL Classification: I23, I24, J21, J24 Keywords: Education and Inequality, Higher Education, Human Capital, Labour Marke

Job Mismatches in Pakistan: Is there Some Wage Penalty to Graduates?

In this study, an attempt has been made to estimate the incidence of job mismatch and its impacts on graduate‘s earnings in Pakistan. The study has divided the job mismatch into three categories; qualification-job mismatch, skill mismatch and field of study and job mismatch. The primary dataset has been used in which the formal sector employed graduates have been studied. This study has measured the qualification-job mismatch by three approaches and found that about one-third of the graduates are facing qualification-job mismatch. Similarly, more than one-fourth of the graduates are mismatched in skill, about half of them are over-skilled and the half are under-skilled. The analysis also shows that 11.3 percent of the graduates have irrelevant and 13.8 percent have slightly relevant jobs to their studied field of disciplines. Our analysis shows that over-qualified graduates face wage penalty under different approaches. After controlling skill heterogeneity, there is less penalty to apparently over-qualified and more penalty to genuinely over-qualified. The over-skilled graduates face wage penalties and the under-skilled get wage premiums as compared to the matched workers. A good field of study and job matches also improve the wages of graduates. JEL Classification: I23, I24, J21, J24, J31 Keywords: Education and Inequality, Higher Education, Human Capital, Labour Market, Wage

The Utilisation of Education and Skills: Incidence and Determinants among Pakistani Graduates

This study estimates the incidence of job mismatch and its determinants in Pakistan, based on three categories: (i) qualification mismatch, (i) skill mismatch, and (iii) field-of-study mismatch. It uses both primary and secondary datasets that target graduates employed by the formal sector. The study measures the qualification mismatch using three approaches and finds that about one third of the graduates sampled face a qualification mismatch. Similarly, more than one fourth are mismatched in terms of skill, about half are over-skilled, and half are under-skilled. The analysis also shows that 11.3 percent hold jobs that are irrelevant to their discipline and 13.8 percent have jobs that are slightly relevant to their discipline. Women are more likely than men to be over-qualified, and age has a negative association with over-qualification. Graduates who belong to political families have a better qualification match but a lower field-of-study match. While a higher level of schooling prevents graduates from being under-qualified, it also raises the likelihood of being over-qualified and over-skilled. Occupation-specific disciplines offer more protection against the possibility of job mismatch. Both full-time education and semester-system education reduce job mismatch, while distance learning raises job mismatch. The phenomena of being over-qualified and over-skilled is more prevalent in lower occupations, as is field-of-study mismatch. JEL classification: I23, I24, J21, J24 Keywords: Education and Inequality, Higher Education, Human Capital, Labour Marke

Efficiency Dynamics and Financial Reforms: Case Study of Pakistani Banks

Banking sector in Pakistan were facing problems of weak health and low profitability due to various factors i.e. low productivity, high intermediation cost (high cost deposits), huge expenditures on establishment, over staffing, large number of loss making branches and mismanagement of funds etc. Owing to this, banking sector in Pakistan was under great deal of pressure to maintain their profitability. To overcome these issues, Pakistan undertook financial sector reforms in early 1990s with financial support of World Bank and Japanese government under the banking sector adjustment loan (BSAL) program. The main goal of these reforms was to improve the Total Factor Productivity (TFP) of financial system through separating ownership, management and strengthening the accountability mechanism. Using the data sets of 20 domestic commercial banks of Pakistan, this study is intended to measure the banking efficiency through Data Envelopment Analysis (DEA) Malmquist Index of Total Factor Productivity (TFP) from 1990 to 2005 to access the impact of reforms on banking sector. The analysis is useful not only for policy makers but it also assess the impact of reforms on domestic commercial banks of PakistanReforms, Banking, TFP analysis

The Persistence and Transition of Rural Poverty in Pakistan: 1998-2004

This study has used two rounds of the two panel data sets to examine the poverty dynamics in rural Pakistan (Sindh and Punjab). The Pakistan Socio- Economic Survey (PSES ) covers two periods, 1998 and 2000, while the Pakistan Rural Household Survey (PRHS) covers the 2001 and 2004 period. More than one-fifth of the households were chronically poor in the PSES rounds , and 11 percent in the PRHS rounds. Further, both chronic and transitory poverty are higher in Sindh and southern Punjab than in centra l and northern Punjab. Illiteracy, household size, dependency ratio, lack of livestock, landlessness, lack of ownership of dwellings, and health expenditure are the factors responsible for aggravating long-term poverty. The higher incidence of transitory poverty in rural Sindh and southern Punjab indicates the impact of large investments made in the public sector to raise the living standards there to the level of the better-off regions.Poverty, Chronic Poverty, Household Panel Datasets, Rural Pakistan

Underemployment, Education, and Job Satisfaction

The economic role of human capital, particularly education has long been documented by economists and policy makers [Becker (1964)]. According to some observers view, educational system is an effective vehicle for producing the skills required to maintain growth in the economy.1 The versatile impact of education on every aspect of human existence makes it a vital area for policy framework especially for developing countries. Developing countries where majority of world’s population resides need to maximise productivity and capabilities of the advanced human capital. The benefits of education range from human to economic, social and cultural. At human level, education contributes in attractive self esteem and confidence leading towards empowerment. In Pakistan, there is significant rise in the average level of education, but over time, more and more workers incapable to use their educational background on the job. Two decades ago, it was judgment that supply of labour meeting the demand of labour. However in recent years, it is argued that supply of some skilled labour may have outstripped the demand of labour in some professions and high qualified peoples taking positions of low qualified peoples. Such underemployment/over-education has not been fully explored in Pakistan

Do Non-farm Enterprises Offer Pathways for Upward Mobility in Rural Pakistan? Evidence from Panel Dataset

This study has analysed the dynamics of rural non-farm enterprises and their role in employment provision, equity enhancement and poverty alleviation in Pakistan. Multiple data sources have been used including cross-sectional and panel datasets. The results show that majority of the rural non-farm enterprises in Pakistan are micro-enterprises with only a limited share in manufacturing. They are informal and have poor forward and backward linkages and high closure rate. Despite the poor asset base, they are providing jobs to more than half of the rural population, contributing to reduction in poverty and equity enhancement among the rural masses. Rich households own enterprises and poor households gain employment from non-farm enterprises. Non-farm economy has a significant impact in reducing multiple deprivations and also has a significant positive impact in pulling households out of poverty with the passage of time. Pakistan, being a country where most of the population is still residing in rural areas and where rural land is not equitably distributed; such non-farm activities are highly important not only to tackle the ongoing food security challenges but also for resource diversification of households. JEL Classification: I32, J21, J43, O14, Q10, R11 Keywords: Rural Development, Non-farm Sector, Employment, Poverty, Multidimensional Povert

Effectiveness of Cash Transfer Programmes for Household Welfare in Pakistan: The Case of the Benazir Income Support Programme

Cash transfer programmes are widely considered a ‘magic bullet’ for reducing poverty. Whether they actually have such an incredible impact on poverty reduction is debatable but they surely are gaining credibility as an effective safety net mechanism and consequently an integral part of inclusive growth strategies in many developing countries. As shown by Ali (2007), inclusive growth rests on three basic premises. First, productive employment opportunities should be created to absorb labour force. Second, capability enhancement and skill development should be focused in order to broaden people’s access to economic opportunities. And lastly, a basic level of well-being has to be guaranteed by providing social protection. Safety nets are at the core of the last pillar, provided mainly through cash transfers, which can be both conditional and unconditional