How Does Human Capital Formation Affect Labour Force Participation in Pakistan? A Primary Data Analysis

Human Capital Formation is considered as main source of labor force participation and employment and raises economic growth and development. The major purpose of the present study is to trace out the human capital related factors which determine employment in Pakistan. The study is based on purely primary source of data, which is collected by the authors by employing multistage cluster sampling techniques. Binomial Logit regression technique is used to estimate the parameters of labor force participation model. The study concludes that the completed years of education, experience, various level of education, health status of workers significantly influenced the labor force participation and employment. In addition, it is observed that some socio economic factors like house holds’ assets, spouse participation in economic activities and number of dependents also significantly affect the employment. Therefore, it is suggested that the government should provide education and health facilities without any discrimination for all. Key words: Labor force; Human Capital; Health status; Workers’ level of education; Logistic regression; Pakistan