Technical and vocational skills development (TVSD) has received pronounced emphasis in planning and policy texts in Pakistan over the last decade. Several positive outcomes are typically ascribed to TVSD, ranging from purely economic (increased productivity, competitiveness and economic growth) to social (improved employment, poverty-reduction and socio-political stability). However, the relationship between TVSD and poverty-reduction is neither simple nor automatic. This paper reviews evidence from the country to establish the linkages between formal education, TVSD and poverty. Issues of access to different skills and employment systems are explored. Moreover, the role of environmental factors such as quality of education and training, macroeconomic situation, and access to credit, business development and re-training services in mediating labour market outcomes is discussed.