Labor Market Trends and Outcomes in Sri Lanka
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4.0 percent in 2006). The youth share of the underemployed declined noticeably (from 40.4 percent to 28.8 percent) over the period. Ninety percent of the underemployed resided in the rural sector. This rural share of underemployment increased from 80.6 percent in 2000 for all workers as well as for different age groups considered. The greatest increase was among adults. At the same time, the share of underemployed in both urban and estate areas decreased. About half (50.9 percent) of the underemployed had 6 to 10 years of education. The remaining half was equally divided among those with a primary or lower education attainment and those who were at least O-level qualified. These shares of underemployed across different education levels remained constant over the 2000–2006 period. The youth share in underemployment decreased over the 2000–2006 period for both young males and young females. This decrease is most prominent for young people in rural and estate sectors and for those with lower educational attainment (O-level qualified or lower).
Summary: Employment The analysis on employment shows that in general, the ability of the country to create employment, measured by the employment-to-population ratio, has slowed over the 2000–2006 period. The employment-topopulation ratio has worsened for youth and is low compared with those for youth in other countries. The employment opportunities available in Sri Lanka are not very attractive: main sources of employment are in the informal sector, which has become more important as a source of employment over time. Although the proportion of those employed in agriculture has decreased, there has been no corresponding expansion in wage and salaried employment. Overall, most of the gain in employment share is in self-employment at the expense of workers in the public and private sectors. By type and sector of employment, the statistics are somewhat better for youth. A higher proportion of youth have moved away from agriculture and, although the share of youth in the public sector has decreased over time, the share of employment in the private sector has increased. The share in unpaid family work has also decreased. At the same time, underemployment remains high in the country relative to unemployment.
Unemployment Trends This section describes the unemployment trends in the country (excluding Northern and Eastern provinces). The definition of unemployed changed