# 1. Introduction

Employment is a key challenge in Pakistan. While its unemployment rate is low at 6.0%,<sup>2</sup> the quality of employment is not high. Among the employed people, three-quarters work in informal sectors; 36% and 24% are self-employed and family workers, respectively; and only 12% are wage workers with a written contract (Pakistan Bureau of Statistics, 2015; Bossavie et al., 2018). The youth, despite being more educated, face a three times higher unemployment rate and are more likely to work in informal sectors than older people (Bossavie et al., 2018).<sup>3</sup> Facing a youth bulge—a large influx of a young labor force—in coming years, the Pakistani economy needs to create more jobs by taking advantage of the relatively well-educated young labor force. However, the higher unemployment rate of the educated young labor force raises the concern that skill development in the current education and training system does not respond well to skill demands in industries.<sup>4</sup> The objective of this paper is to provide new descriptives about labor market conditions and skill demand and supply in Pakistan based on novel data from a leading online job portal, Rozee.pk. Online job portal data have unique features that can supplement traditional data such as labor force surveys in four respects.<sup>5</sup> First, online job portal data provide real-time information, whereas traditional data are published after a time lag of months to even a year. As technologies and economic conditions are rapidly changing, real-time information of labor markets is becoming more important. Second, the data provide rich, granular text information about skill demand and supply. For example, included in the data are the job’s title, description, and qualification requirements and jobseeker’s education, skills, professional experience.<sup>6</sup> Third, the data include information about actual labor market transactions and the job matching process, which are invisible in traditional labor force and enterprise surveys. With this information, it becomes possible to analyze what affects, and can improve, job matching. Lastly, the data provide information linked between employers and jobseekers. The availability of this linked information allows labor market diagnosis to be well connected between the demand and supply sides, which is not easy with labor force survey and enterprise survey data that are separately conducted.

In addition to the novel features of the data, there are other reasons for analyzing online job portals. First, online job portals are increasingly common. A considerable amount of job postings in developed countries have been shifting from print media to websites (Kroft and Pope, 2014; Mang, 2012). Despite the fact that the internet access in developing countries is still limited (Shahiri and Osman, 2014), many people already use them.<sup>7</sup> Second, online job portals can improve the efficiency of the job search and matching process. The literature finds that online

> 2 A primary reason for the low unemployment rate is that most people in the country cannot afford to be not employed so engage in informal and self-employed jobs even though they are not necessarily satisfied with work conditions and compensations (Pakistan Bureau of Statistics, 2015).

> 3 The youth are defined as people aged 15 to 24 years.

> 4 Bossavie et al. (2018) find that the unemployment rate is 16% among those with postsecondary education but virtually zero among those with no and primary education.

> 5 For reviews of advantages and disadvantages of using online labor market data, see Einav and Levin (2014) and Kureková et al. (2015).

> 6 For example, Deming and Kahn (2018) analyze skill demands by examining text information in online data.

> 7 For example, the use of an online job portal is already common in India (Nomura et al., 2017).

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