Research Agenda

Research Programme: 2008 – 2010

The Sri Lankan labour market is in a state of rapid transition. Changing demographic structure and emigration is ageing and slowing the growth of the working age population and the available labour supply of the country. Given this, it is important to make optimum use of available labour resources in the country. However, descriptive statistics indicate otherwise. Youth unemployment rates, although reduced, are still high in the country. Moreover, in the recent past employment creation in the country has mainly been in the informal sector, where there is limited social protection and poor work conditions. On the demand side, technological change and globalization are creating new opportunities, both locally as well as globally. Although, the population has become more educated over time, the gains were mainly at the primary level. The need is to improve education attainments at the higher levels, such that workers are able to learn complex tasks and new technologies required to work in the Information Technology Enabled Services (ITES).

An estimated 1.447 million Sri Lankans (equivalent to 20 per cent of the workforce in the country), are working abroad. On average, the departures for foreign employment have increased by 4.5 per cent over the 1992 to 2006 period to 201,948 persons a year. In 2006, 76,167 youth (37.7 per cent of the total) or a number equivalent to 5.91 per cent of the youth labour force for that year migrated for work. Majority of the migrants (94 per cent of females and 46 per cent of males) were unskilled workers. The economic benefits to the country of remittances sent by these workers at the macro level are many. Nonetheless, the impact of remittances on household welfare remains unclear. Given the importance of remittances to the country, the government has been promoting temporary foreign employment, particularly amongst the more skilled workers. However, labour market indicators suggest that the labour force growth in the country is stagnating, and some sectors are already facing labour shortages.

The Labour, Employment and Human Resources Development research programme at IPS is conducting several studies to better understand the changing patterns of the labour market and provide policy recommendations on meeting the challenges posed by these changes. The research will give especial attention to investigate into the labour market and social welfare impacts of labour migrations to the country.

The studies conducted under the Labour, Employment and Human Resources Development research programme include:

•      “Impact of Remittances on the Household of the Emigrant and on the Economy of the      Migrant’s Country: A Sri Lankan Perspective”. A SANEI funded project started in December,      2008, which looks at the impact of remittances on household social and economic well-      being.
  

•      “Labour Market Trends and Outcomes in Sri Lanka”, funded by the World Bank. This study      describes the labour market trends and outcomes in Sri Lanka using Labour Force Survey      Data.