Digital Technology Adoption, Financial Development and Unemployment in Pakistan
DOI:
https://doi.org/10.62843/jrsr/2025.4d177Keywords:
Digital Technology, Internet Usage, Unemployment, ARDL, Pakistan, Labor MarketAbstract
The rapid expansion of digital technologies has transformed labor markets worldwide, raising important questions about their implications for employment in developing economies. This study investigates the impact of digital technology adoption on the unemployment rate in Pakistan over the period 1993–2024. Digital technology adoption is proxied by internet usage, while GDP per capita, gross fixed capital formation, and inflation are included as control variables. Using annual time-series data from the World Development Indicators, the study employs the Auto-Regressive Distributed Lag (ARDL) bounds testing approach to examine both long-run and short-run relationships among the variables. The results confirm the existence of a long-run co integrating relationship. Long-run estimates indicate that digital technology adoption, FDI and GDP per capita significantly reduce unemployment in Pakistan. The findings suggest that digitalization, when supported by growth-oriented and inclusive policies, can contribute to unemployment reduction in Pakistan. The study offers policy-relevant insights for promoting digital inclusion, skill development, and employment generation in developing economies.
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