In a recent discussion with the CEO of The Citizens Foundation (TCF), a non-profit that runs one of Pakistan’s largest networks of schools, one striking fact stood out: even families from the lowest income brackets continue to prioritize education for their children. This parental commitment underscores a broader belief across Pakistan: education is not just a luxury, but a necessity for social mobility and a better future.
While students who graduate from TCF schools often see their household income multiply, the broader question remains: Is education, especially in Pakistan’s current economic climate, delivering adequate returns, financial or otherwise?
Returns on Education: How Does Pakistan Compare?
According to the Economic Advisory Group’s policy brief titled “Education Disaster: Nowhere to Go for Many”, the average return on investment (ROI) in education in Pakistan is around 6.5%—comparable to investing in physical assets like gold. But here’s the catch: in a country where nearly 65% of the population is under 30, this return is not enough to keep up with the surging number of job seekers.
For context, global data from the World Bank suggests that an extra year of schooling typically increases income by 8.8% annually. In contrast, in Pakistan, the ROI drops to 2% or less in 40 out of 126 districts, indicating significant regional inequality and structural issues in the education-to-employment pipeline.
Industry Matters: Education Alone Is Not a Guarantee
The value of education also depends heavily on the industry and occupation. For instance, a domestic worker with a primary school education may earn only marginally more than one with no formal education. In white-collar sectors, a business graduate might still struggle to land a job unless equipped with in-demand digital or technical skills.
This raises a critical question: Are we educating children for an economy that doesn’t exist yet? If Pakistan’s labor market continues to offer primarily low-skilled or informal sector jobs, formal education alone cannot significantly improve livelihoods.
Graduate Unemployment: A Growing Crisis
The Pakistan Institute of Development Economics (PIDE) recently published a study titled “Disaggregating the Graduate Unemployment in Pakistan”, which highlights that graduate unemployment stands at nearly 19%—almost triple the national average. Thousands of degree holders are entering the job market each year, but few find relevant employment. This mismatch between education and economic opportunity is not only disheartening but also dangerous, as it feeds into underemployment and brain drain.
Why Families Still Choose Education: Beyond the Numbers
Despite these grim statistics, parents across socio-economic backgrounds still push their children toward education. Why? Because education offers far more than just income potential:
- Improved health outcomes
- Enhanced decision-making abilities
- Greater political awareness
- Social mobility and reduced poverty over generations
Education is an enabler—it empowers individuals to break cycles of poverty, resist exploitation, and contribute meaningfully to their communities.
The Way Forward: Aligning Education with Economic Needs
To make education “worth it” in economic terms, Pakistan must evolve its economic structure:
- Invest in digital and technical skills training
The future of work is digital. Education policies must prioritize skills like coding, AI, digital marketing, and entrepreneurship. - Revamp the curriculum for relevance
Degrees must align with industry demand, particularly in high-growth sectors like IT, healthcare, and renewable energy. - Public-private partnerships
Encourage collaboration between educational institutions and the private sector to bridge the skill gap. - Boost local industry and innovation
Without job creation in high-value sectors, even the best education will yield low economic returns.
FAQs
1. What is the average return on education in Pakistan in 2025?
It is estimated at 6.5%, similar to the ROI of gold investments.
2. Why is graduate unemployment so high in Pakistan?
Because the job market doesn’t match the degrees being offered, leading to a skills mismatch.
3. Does education guarantee a job in Pakistan?
Not always. Industry demand and regional disparities often affect employment prospects.
4. Is it still worth sending children to school?
Yes. Despite low economic returns, education has lifelong social and personal benefits.
5. How can Pakistan improve returns on education?
By aligning curriculum with market needs, encouraging vocational training, and expanding economic opportunities.