early 79 percent of Pakistan’s population is under the age of 40, according to Census 2023. For two decades, this figure has been offered as evidence of a coming demographic dividend—a young nation set to outpace its ageing neighbours. The dividend has not arrived. What has arrived instead is a generation that has watched opportunity move past them without stopping for them.

The argument I want to make is specific: the Pakistani youth are not disadvantaged by circumstance alone. They have been systematically under-served by choices successive governments and institutions have made; not for lack of talent but because the country built an economy and education system that were never designed to absorb the numbers they kept producing.

The employment data supports this assertion. According to the Pakistan Bureau of Statistics’ Labour Force Survey 2024-2025, youth unemployment among 15- to 24-year-olds climbed to 12.6 percent, up from 11.1 percent four years earlier; among the wider 15-to-29 cohort, it rose to 11.5 percent from 10.3 percent. Overall unemployment rose from 6.3 to 6.9 percent over the same period—a figure the Economic Survey 2025-2026 has since revised upward to 7.1 percent, as the labour force grew by nearly 14 million, to 85.6 million.

Job creation did not keep pace.

Women fared worse. Female unemployment climbed from 8.9 to 9.7 percent, widening a gap that was already among the largest in the region. A labour market that cannot absorb its growth is not experiencing a temporary setback; it is failing structurally. Young people are bearing the cost.

Education explains much of the why. Roughly 25 million children are out-of-school. Among those on rolls, an estimated 56 percent drop out between primary and middle school, according to the Pakistan Education Statistics Report 2023-2024. Public spending on education has been eroding for years: 2.0 percent of GDP in 2018-2019, down to 1.4 percent in 2020-2021, and just 0.8 percent by 2024-2025. According to the Pakistan Economic Survey 2025-2026, nominal education spending then fell by more than 60 percent in a single year, from Rs 899.6 billion to Rs 356.5 billion. This made education’s share of the GDP to what is likely the lowest level in the country’s history, well short of the 4 percent benchmark international bodies recommend.

A country where eight in ten people are under 40 and locked out of decent work is not managing a youth problem. It is carrying a structural risk that touches growth, stability and social cohesion together.

The schools mostly transmit information rather than build analytical and creative capacities young people will need—the assessment system rewards memorisation over thinking. None of this is a mystery to policymakers. It has simply not been treated as urgent.

That neglect is compounding just as the nature of work itself shifts. The World Economic Forum’s 2023 Future of Jobs report estimated 69 million new jobs would be created globally over five years, against 83 million eliminated. Companies expect 44 percent of workers’ skills to be disrupted by 2027, with close to 60 percent of the workforce needing reskilling.

Pakistan is, in effect, training students for jobs that are disappearing while doing almost nothing to prepare them for the ones taking their place.

Other countries that started from a comparable demographic position did not let the window close. Bangladesh and Vietnam built broad, export-oriented manufacturing sectors that absorbed millions of young, low-skilled workers, then moved up the value chain as education caught up. Pakistan has had a comparable, arguably, longer runway and has produced neither the manufacturing base nor the education pipeline to match it.

A youth bulge becomes a dividend only when a state builds toward it deliberately rather than treating it as a windfall that cashes itself. The consequences reach beyond individual hardship.

An economy that cannot employ its young loses the return on every rupee spent raising and educating them. Frustration finds other outlets: informal work, irregular migration, disengagement from civic life, susceptibility to whatever narrative offers an explanation for their exclusion. A country where eight in ten people are under 40 and locked out of decent work is not managing a youth problem. It is carrying a structural risk that touches growth, stability and social cohesion together.

None of this means the picture is fixed.

Real openings exist—some are growing quickly. The digital and gig economy has already given young Pakistanis in freelancing, software and digital services a route into income that bypasses a sluggish formal sector. The green economy is another: renewable energy, environmental management and ESG-linked roles are among the fastest-growing job categories worldwide—Pakistan’s own energy crisis makes this less a luxury than a necessity. Female labour force participation, among the lowest in the world, may be the single largest untapped source of growth available to the country, provided the barriers—mobility, safety, childcare, workplace discrimination—are actually addressed rather than acknowledged and set aside.

These openings will not close the gap by themselves. They require an education system that teaches analytical thinking and technological literacy instead of recall; financing that moves education spending toward the benchmark it has ignored for a generation; and reskilling infrastructure built with employers who understand where demand is heading. Vocational training needs to stop being treated as a lesser track for academic failures and start being treated as a legitimate, well-funded pathway into skilled work.

None of this exceeds the state’s capacity. It has simply never been made a priority commensurate with the size of the population it concerns.

The deprivation the Pakistani youth have experienced is not the product of some inherent lack of ability or ambition. It is the cumulative outcome of decisions: how much to spend on schools; how to structure an economy; whose participation to enable and whose to overlook. That, in a way, is the encouraging part. What these decisions produced, different decisions can undo. The demographic bulge that has been treated for years as either a promise or a threat is neither. It is a design problem—Pakistan still has the raw material for a genuine dividend. What it has lacked is the will to build the system that would let it pay out.

The writer, an educationist, is the author of Education Policies in Pakistan: Politics, Projections and Practices. He can be reached at: www.drshahidsiddiqui.com.