Informal economy in Pakistan

Carpet weaving © ILO

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The informal economy in Pakistan is large where workers have limited access to labour welfare services. The Labour Force Survey 2008-09 states that the informal sector accounts for more than 73.3 per cent of the employment in main jobs outside agriculture, more in rural than in urban areas. The informal sector has shown increase in its employment from the previous year. The key sector of employment in the informal economy are wholesale & retail trade manufacturing, community/social and personal services, construction and transport.

The new 2010 Labour Policy has set parameters to address the issue of workers in the informal economy. Under the new policy, the government is aiming to provide benefits to the workers in the informal economy, including home workers and domestic workers, from improved safety and health arrangements, access to social security arrangements, and the payment of minimum wages, where an employee-employer relation is evident.

The incidence of child labour is also prevalent in the informal economy. Pakistan’s only child labour survey of 1996 indicated that 3.3 million under the age of 14 years were working in Pakistan. The government is committing to eliminating the employment of children less than 14 years of age, and the employment of those between the ages of 14 and less than 18 years will be strictly controlled, through a combination of stronger legislation and the introduction of labour extension services.