Pakistan loses an estimated $31.5 billion annually in productivity and potential exports due to workforce skills shortages, while youth unemployment and the lack of technical training continue to pose major economic challenges. According to World Bank estimates, only 7% of young people in Pakistan access formal technical and vocational training, compared with a regional average of 22%.
A case study titled How to Boost Youth Employment in Pakistan for the Age of AI, featured at the World Economic Forum’s annual meeting of Global Future Leaders in Dubai, highlights the growing gap between education and employment. Nearly one-third of Pakistanis aged 15 to 29 are not engaged in education, employment or training, with the proportion exceeding 50% among young women. Graduate unemployment stands at 18.3%, while unemployment among graduates aged 20 to 24 has reached 32.8%, according to Gallup Pakistan’s analysis of the Labour Force Survey 2024–25.
The technology sector also faces difficulties absorbing fresh graduates. According to the P@SHA Skills Survey 2025, member companies hired 13,350 fresh graduates from an estimated pool of 72,952 in 2024, representing an absorption rate of 18.3%. Meanwhile, the number of computer science and information technology graduates from accredited programmes is projected to rise from 28,091 in 2024 to around 62,000 by 2028.
The study attributes the employment gap to limited career guidance, inadequate mentorship, weak links between educational institutions and employers, and insufficient practical experience. It warns that artificial intelligence could further reshape entry-level jobs and employment requirements. The report calls for stronger vocational training, industry partnerships and career development support to help young Pakistanis gain practical skills and improve their employment prospects.