Equity goals

In Sri Lanka, female participation in the formal labour force at 35% is significantly lower than for men. Unemployment rates are also significantly higher for women. There is also a large gender gap in the share of women who are unpaid family workers, who account for 20.4% of women compared to 3% of men. So how can Sri Lanka provide better work for women?

Sri Lanka’s female labour force participation (LFP) rates declined from 41% in 2010 to 36% in 2016. This trend stands in contrast to the country’s achievements in human development outcomes that favour women, such as high levels of female education and low total fertility rates, as well as its status as a middle-income country. Women’s experience in Sri Lanka’s labour market remains characterised by: (1) low LFP; (2) high unemployment, especially for women under age 30; and (3) persistent wage disparities between the sexes, though these are shrinking over time, observes the World Bank in its latest Development Update.  

There are three possible hypotheses to explain gender gaps in labour market outcomes:(1) household roles and responsibilities, which fall disproportionately on women, and the associated socio-physical constraints on women’s mobility; (2) a human capital mismatch, whereby women are not acquiring the proper skills demanded by job markets; and (3) gender discrimination in job search, hiring, and promotion processes.

Marriage continues to penalise women’s participation in labour markets, though less so than before 2010. As of 2015, marriage lowers odds of FLFP by 4.4% points, while boosting men’s odds by 11% points. Having young children is associated with even lower odds of FLFP, lower chances of becoming a paid employee, and lower earnings compared to these odds before 2010—and compared to men’s odds. Social norms against women’s mobility outside the home, especially for commuting, exacerbate the gender gap in LFP.

Discrimination appears to determine large shares of gender gaps in LFP and earnings, though to a diminishing degree over time, especially since 2009, says the report. Primary research confirms that employers actively discriminate by gender to a much smaller degree than employees suspect. Yet, stubborn occupational segregation across industries suggests that this may not be the case for promotions—especially into high-skill and management jobs, in which men continue to dominate. Raw gender wage gaps are shrinking, but the portion of these gaps that is determined by gender discrimination— rather than endowments—is increasing over time and is especially pronounced in the public sector.

It is important to focus on four priority areas for addressing the multiple supply- and demand-side factors to promote women’s entry into and continued employment in the labour market. This is important for preparing for an aging population and to achieving the country’s growth and equity goals.

Reduce barriers to women’s participation in paid work, particularly (a) lack of child care services, and (b) socio-physical constraints on women’s mobility, which undermines their ability to travel to work.

It is also important to strengthen girls’ early orientation to career development and to acquiring the types of education and skills (e.g., STEM courses) that prepare them for labour markets. It is imperative to ensure gender equity in labour legislation and non-discriminatory workplace environments, which includes zero tolerance for sexual harassment in—and traveling to—the workplace and provision of safe transportation for women; undertake affirmative action and ethical branding initiatives to expand women’s share of employment and firm ownership in emerging sectors.