The United States has supported Verité Research in producing its latest youth labor market assessment. The findings were presented to the public via a webinar titled, “Improving Youth Employment & Entrepreneurship in Sri Lanka: Insights & Strategies” on November 19. It was supported under the U.S. government’s development arm the United States Agency for International Development Agency (USAID)-funded youth skills development and entrepreneurship project, YouLead.

The assessment focused on developing innovative methods to improve employment and entrepreneurship among youth in Sri Lanka. Findings focused on overcoming challenges relating to youth unemployment and low female participation in the workforce and to promote entrepreneurship among youth.

USAID Mission Director Reed Aeschliman noted the importance of strengthening the entrepreneurial mindset that can lead to more gainful and self-employment of youth in Sri Lanka. He further emphasized the importance of increasing women’s participation in the economy and taking effective steps to create more economic opportunities for youth to foster sustainable and inclusive economic growth.

Executive Director Verité Research Dr. Nishan de Mel, who led the research team, noted that this study aimed to tap into the extensive body of research available to devise quick and practical solutions the private sector and other stakeholders can use to unlock employment and entrepreneurship opportunities for youth in Sri Lanka.

The report’s key recommendations are:

1. Moving youth to Own-Account Work (OAW) – The assessment recommends re-thinking the path to youth entrepreneurship by encouraging and supporting youth to become own-account workers before becoming fully-fledged businesses. Verité estimates that if Sri Lanka can successfully promote OAW among youth in Sri Lanka, through awareness building about OAW and supporting access to markets via the usage of digital platforms, the country may see the setup of 216,000 new micro and small businesses in the future. This can also eventually lead to the creation of almost 400,000 new jobs in the country.

2. A case for state supported maternity leave benefits – The assessment proposes Sri Lanka to shift towards a state-supported maternity leave program via tax concessions. That way it will reduce the discrimination that women aged 20-40 years face in the labor market stemming from mandatory employer-funded maternity entitlements. Verité estimates that this could cost as little as 0.25% of tax revenue (Rs 4.2 billion) annually, much less than other government welfare and employment programs. This can lead to increased economic participation by women, helping to inject more income to households, cushioning the impact of post-Covid job losses, and acting as an economic stimulus to the private sector.

3. Engaging disengaged young women: The assessment finds that disengagement from the labor market is a gender problem in Sri Lanka, with 89% of those disengaged being women. However, nearly one out of every three disengaged young women are interested in working and Verité Research proposes implementing Return-To-Work programs with flexible working options to target women who have left the workforce for family-related reasons but are now interested in returning to work. Verité Research estimates that it could lead to the addition of a potential workforce of 243,000 new workers for the Sri Lankan labor market.

Charles Conconi, Project Director YouLead, concluded the program by thanking the Verité Research team’s efforts and USAID for supporting this valuable research. He emphasized that Youlead is committed to engage in practical and evidence-based interventions to improve youth entrepreneurship and women’s employment in Sri Lanka.

The full research report can be accessed here:

Youth Labour Market Assessment Sri Lanka