Labour force participation rate, a wake-up call for policymakers

by Sanath Nanayakkare

The Sri Lankan Labour Force Participation Rate (LFPRs) released by the Department of Census and Statistics shows that the lowest LFPR, since 2013, was reported in the first quarter of 2018.

Quarterly figures show LFPR in Q1 2016 was 54.1 million, by both genders all-island, which crept up to 54.7 million in Q1 2017. However, causing concern to policymakers, this number has dwindled to just 52 million in Q1 2018.

In 2013, Sri Lanka’s total LFPR was 53.7 million by both genders all-island. If Q1 2018 figure is going to be around the same for Q2 and Q3 of 2018, Sri Lanka’s labour force participation would report a decline by 1.7 million within 5 years, instead of showing an upward trend.

Figures show that Economically Active Population was about 8.3 million in the first quarter of 2018, of which 65.4 percent were males and 34.6 percent female. The Economically Inactive Population was about 7.7 million. Out of this 25.6 percent were males and 74.4 percent were females.

During 1Q 2018, the total number of employed persons in Sri Lanka is estimated at 8.0 million. Of which, about 45.2 percent engaged in the service sector, 27.9 percent in industries sector and 26.9 percent in agriculture sector. In Q1 2018 a decline in employment numbers can be observed in all three sectors.

Majority of the workforce are private sector employees, followed by own account workers. Highest employment share is in service sector and this is true for both male and female, while the lowest shares are for the agriculture sector. Among employed females, 29.9 percent is in the agriculture sector, while this share is 25.3 percent for males.

It is important to note that In terms of Labour Force Participation Rate (LFPR) since year 2013 male participation in the labour force has always been higher than that of females.

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