Unemployment and development

Unemployment rate rose to a nine-year high of 5.1% in the 3Q of 2019, as a result of disruption caused in the economy after the Easter Sunday Attacks. Increasing unemployment levels could be the main contributor for the wage growth slowdown seen last year. In the months of September and October, the inflation rate took over the nominal wage growth, indicating eroding consumer spending power.

The number of unemployed persons is estimated as 437,797 during the 3rd quarter of 2019. The unemployment rate for the 3rd quarter of 2019 is 5.1%, according to the Census and Statistics Department. The estimated economically active population is about 8.6 million in the 3rd quarter of 2019, of which 65.2% are males and 34.8% females. The economically inactive population is about 7.9 million; out of this population, 26.5% are males and 73.5% females.

Data shows that unemployment rates are nearly double for women, and significantly higher than the national average, which hovers around 4.2%- 4.9%. These numbers have remained consistent for many years, showing the embedded structural anomaly in Sri Lanka’s economy.    

While successful on several development indicators, Sri Lanka has the 20th largest gender gap in labour force participation globally, which impedes the country’s goals for growth and equity.

While Sri Lankan women are educated and live longer, many do not work outside the home, partly due to a skills mismatch – a disparity between the skills women attain, and what the market demands or will pay for.

Clearly there is a deep need to empower women and increase their chances for employment and entrepreneurship, especially at the grassroots level. This is all the more relevant in the spheres of technology usage and financial inclusion. Less than a fifth of Sri Lankans use the internet, and only 10% of households have direct access, according to the World Bank. This means that women have less access to develop themselves and improve entrepreneurship skills. An obvious gap in Sri Lanka’s development toward a knowledge economy stems from the lack of university graduates, especially women, who major in technical fields. This also means fewer women are likely to take up technical vocational training, and branch out into unconventional sectors.

The low female labour force participation in Sri Lanka has three key factors: gender norms around household roles – women are held responsible for household chores, limiting access to outside employment; skills mismatch – the aforementioned disparity between the skills attained and market demands; and gender bias – active and institutional gender discrimination, wage gaps, discriminatory work places, and weaker job networks, compared to male counterparts.

This also means fewer women would have to seek employment as migrant workers, and would earn more from their trained skills.

For this transformation to take place, the Government and policymakers have to incorporate ICT as well as gender and development into their existing programs. They would have to put in long-term plans to educate and equip women to learn skills that are not necessarily the norm, but would eventually become socially acceptable.

To help address low female labour force participation, the World Bank says civil society organisations can promote and advocate for women to access part-time work, maternity leave, and childcare services in an effort to eliminate associated stigma.

Also, the private sector can help young women to identify and develop careers of their choice from an early age, regardless of gender norms and restrictions and provide access to job information and placement services. Such focused policies would be needed to not just foster growth, but make it more sustainable, and they have to be supported by strong policies from the Government.