1.      Introduction

1.1  World Outlook

Throughout the world, there is recognition of the importance of increasing women’s participation in the labor force to enhance household capabilities and achieve sustainable economic growth. According to the World Bank gender data (2022), women’s participation in the labor force has remained just over 50% for the past three decades.

However, the statistics reveal significant regional disparities in women’s labor force participation, with South Asia, the Middle East, and Africa recording the lowest rates compared to men. As per the World Bank gender data (2022), women’s labor force participation in South Asia stands at around 25.6%, while men’s participation is at 74.7%. It is worth noting that as of 2020, 81.3% of girls in South Asia have completed lower secondary school, compared to 78.5% of boys.

Low women’s labor force participation is a growing concern worldwide. Research in this field has identified several factors contributing to this issue, including women’s limited opportunities for business expansion or career progression, their tendency to work in the informal sector, and the gender wage gap, with women earning less than men even when they are engaged in work.

1.2  Country Context

Sri Lanka records around 52% of women compared to men in the population, where female literacy rate was recorded as 92.3% in 2021.[1] Further, as revealed by the University Grants Commission of Sri Lanka, the women university enrollment rate remains around 64%[2] compared to men in 2020, where women have achieved higher graduate outputs compared to men over the years. Despite these statistics which show positive results on women education attainments, the statistics of the labour force survey conducted by the Department of Census and Statistics (2021), revealed that only a 31.8% participation of women present in the labour force compared to men in Sri Lanka.

2.      Gap between Education Attainments and Labour Force Participation

According to statistics from the Department of Education, women in Sri Lanka have consistently shown higher achievements in the G.C.E Ordinary Level (O/L) and G.C.E Advanced Level (A/L) examinations over the years. In 2019, the percentage of women who qualified in the G.C.E. O/L was recorded as 81.4%, compared to 64.6% of men. Similarly, the percentage of women eligible for university entrance remained around 56.2%, while it was 43.8% for men. Additionally, the gender statistics from the Department of Census and Statistics (2019) indicate that women accounted for around 63.1% of the graduate output, while men accounted for 36.9%. However, despite these higher educational attainments, the recent labor force survey (2021) has revealed that only 34.3% of economically active individuals in Sri Lanka are women, compared to 65.7% of men. The labor force participation rate for women stands at only 31.8%, while it is 71% for men. This indicates that the labor force participation of women in Sri Lanka is low compared to that of men, despite their higher levels of education.

3.      Literature Review

Many research studies around the world have focused on the labour force participation of women as a factor determining labour supply and thereby the economic growth of a particular country, region or world at large. Theoretical literature on women labour force participation were based on theories such as neo classical static labour supply model, tudaro migration theory, theory of U shape etc.

The literature revealed a long-run causal relationship exists between female labour force and economic growth with a U-shape relationship between Gross Domestic Product and female labour force participation (Thaddeus, 2022). The study used a sample of 42 sub-Sahara African countries using annual data from the World Bank development indicators and the long-run causal effect of female labour force and economic growth was analysed using the Autoregressive Distributed Lag model and Granger causality test for causality and direction. Economic growth was measured in Gross Domestic Product (GDP) where independent variables used in the study were female and male labour force participation rates, urban population, fertility rate etc. The study of (Thaddeus, 2022) indicated the importance of having an adequate female labour force participation to promote economic growth. Further, the study conducted by (Luci, 2009) on the female labour market participation and economic growth using “feminization U” hypothesis revealed that in developing countries, economic growth promotes women’s labour market participation only with active labour market policies which enable the entry of women into the labour market.

Literature supports the view that participation in education is an investment in human capital, similar to business investments in equipment (Becker, 1994). It is believed that investing in education for females can lead to increased efficiency in the labor force and better household management, as females are taking on leading roles in managing households.

A study conducted by Robert J. Barro (2000) on economic growth using models such as the Solow-Swan model and Ramsey Growth model revealed that while growth rates have a negative relationship with the physical stock of capital, human capital has a positive influence on economic growth rate. This indicates the need for investing in human capital to achieve higher economic growth rates for a nation.

Another study conducted by Faridi (2009) in Pakistan examined the impact of different levels of education on female labor force participation. The study used primary data collected through stratified random sampling and simple random sampling techniques, interviewing 164 individuals aged 15-64 years. The study found that all education levels, except basic education up to the middle level, had a positive and significant impact on female labor force participation. As the level of education increased, females were more likely to participate in economic and business activities.

According to a survey conducted by the International Labour Organization in Sri Lanka on factors affecting women’s labor force participation, factors such as education beyond secondary levels, lower levels of household consumption, husbands being blue-collar workers rather than manual workers, and residence in estates were associated with an increased probability of labor force participation by women. The survey also found that husbands’ and wives’ perceptions of gender roles and time spent on household chores and care work were significant predictors of wives’ engagement in market work. The survey collected data through a questionnaire administered to 500 women and their husbands, covering urban, peri-urban, rural, and estate divisions in the districts of Colombo, Kalutara, and Ratnapura (International Labour Organization, 2016).

A study conducted by Anju Malhotra (1997) aimed to understand women’s labor force behavior in developing societies through a household-level analysis of young, single women in Sri Lanka. The study revealed that family and gender roles are fundamental to women’s labor market entry and success. It emphasized the importance of considering factors such as familial expectations, social norms, individual abilities and preferences, and resources that facilitate access to the labor market. The study used data gathered through a combination of survey and focus group interviews, focusing on a sample of 812 single women between the ages of 18 and 33 in the Kalutara district of Sri Lanka (Malhotra, 1997).

4.      Importance of Women Labour Force Participation

In 1979 United Nations General Assembly adopted all forms of discrimination against women. The convention ensured the women right to work as an inalienable right of all human beings including right to same employment opportunities, right to free choice of profession and employment, right to equal remuneration, right to social security and right to protection in health and safety in working conditions (Assembly, 1979).

The 2030 Agenda for Sustainable Development, adopted by all the United Nations member states in 2015 also encourage the women participation in economic activities. Under its goal 4 – “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all” and more specifically under the goal 5 – “achieve gender equality and empower all women and girls” (Nations, 2015). Considering the above, a country should ensure equal and fair access to labour force by women and should take necessary steps for women empowerment to be aligned with the SDGs.

Further, based on the literature review, it could be observed that most of the studies in the field have shown a positive impact on the economic growth by the women labour force participation. Also as identified many research, the education has increased the women labour force participation, which was identified as an investment in human capital.

Sri Lanka is a developing country with a majority of women in the population, increase in women’s labour force participation could be identified as an effective development tool. Therefore, the country should focus on formulating policy measures to increase women’s participation in the labour force.

5.      Factors Determining Women’s Labour Force Participation

Based on the literature, out of the many social and economic factors leading to women labour force participation, the leading factors could be identified as education, marital status, age, number of kids, household income, women role in households and the level of experience.

6.      Gender Disparity in the Sri Lankan Labour Market

The gender disparity in the Sri Lankan labour market has been identified as a significant workforce anomaly by many of the research. It could be observed that there is hidden or explicit gender disparities in some industries and sectors of the country. In overall this could be low compared to most of the South Asian countries in the region, where Sri Lanka stands as a gender equal country. However, when it comes to employment, still there could be observed some bias towards males over females.

According to a social research conducted among employment-seeking women in the country, specifically within the age group of 18-25 years, it was observed that certain industries show a preference for male counterparts over females.

The banking sector of the country is one industry where a preference for male counterparts over females can be observed. In this sector, male participation has been recorded at 50.4 percent compared to 49 percent for females, despite females making up a significant portion of the labor force.

A study conducted by Gunawardana (2017) on nine domestic commercial banks in Sri Lanka found that only 9 percent of females were in the director board, 16 percent were in corporate management, and 13 percent worked in the management teams of these banks.

According to UN Women (2022), factors contributing to low women’s labor force participation in Sri Lanka include unpaid care and household work, skills deficits, and gender discrimination on the supply side. The policy brief also highlights the presence of gender-based segregation of occupations and gender-based wage discrimination in the industry and services sectors in Sri Lanka. There is considerable evidence of gender-biased discrimination by employers in Sri Lanka, as stated by UN Women (2022).

Furthermore, a study by Jennifer L. Solotaroff, George Joseph, Anne T. Kuriakose, and Jayati Sethi (2020) revealed that many surveys have shown no gender difference in terms of education, experience, technical skills, and soft skills that employers reportedly seek in new hires. The data indicates that employers expect both male and female workers to have the same educational qualifications for the job.

Most important characteristics employers seek in new hires[3]

Sri Lanka also faces a significant gender gap in political empowerment. Despite producing the world’s first woman prime minister in 1960, the country has widened its gender gap in political empowerment, as stated by the World Economic Forum (2023).

In the judicial sector of Sri Lanka, there is low women’s participation. According to Women in Leadership Roles (2023), only 23 percent of judges in Sri Lanka are female. A study conducted by the International Labour Organization (2016) found that over time, the share of employment in the private sector by women has decreased, while there has been a slight increase in public sector employment and own account work for women.

Employment status by gender[4]

One of another way of increasing women economic participation is by encouraging women to become entrepreneurs, employers or own account workers. This would provide more flexibility for women.

7.      Conclusion

Higher women’s labor force participation has several positive social and economic impacts on a country. Firstly, it ensures a higher contribution to GDP and effective use of the investments made in women’s education by a country. When women are economically active, they contribute to the overall economic growth and development of the nation.

Moreover, if women who are not economically active do not enter the labor market, it can create labor shortages. This may lead to the employment of foreign migrant workers at higher salaries, increasing labor costs and the outflow of the country’s currency.

Women’s education also has a direct impact on households. Educated and earning women are better able to manage their households and invest in the education of their children. Research has shown that households with economically active women tend to have higher living standards compared to households with economically inactive women.

Furthermore, maternal education has been strongly associated with children’s cognitive development. When mothers are educated and have access to better resources and working environments, they are more able to invest in their children’s well-being and contribute to the financial stability of the household. This can help reduce household poverty levels and contribute to overall economic development.

Given that Sri Lanka has a majority of women and a higher proportion of educated women, it is important for the country to start reaping the benefits of this valuable resource. To increase women’s labor force participation, coordinated efforts from the government, private sector, and non-governmental organizations are required. These parties should work together to create an enabling environment for higher women’s labor force participation in the country.

8.      References

International Labour Organization. (2016). Factors Affecting Women’s Labour Force Participation in Sri Lanka. Colombo: International Labour Organization.

Anju Malhotra, D. S. (1997). Entry versus success in the labor force: Young women’s employment in Sri Lanka. World Development, 379 – 394.

Becker, G. S. (1994). Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education. Chicago: University of Chicago Press.

Faridi, M. &. (2009). Impact of Education on Female Labour Force Participation in Pakistan: Empirical Evidence from Primary Data Analysis. Pakistan Journal of Social Sciences, 127-140.

Gunawardana, K. (2017). Women Participation in Senior Management Positions in Licensed Commercial Banks in Sri Lanka. SSRN.

Jennifer L. Solotaroff, George Joseph, Anne T. Kuriakose, and Jayati Sethi. (2020). Unlocking Women’s Potential in Sri Lanka’s Labor Force. World Bank Group.

Luci, A. (2009). Female labour market participation and economic. Int. J. Innovation and Sustainable Development.

Robert J. Barro, X. S.-i.-M. (2000). Economic Growth.

Thaddeus, K. D. (2022). Female labour force participation rate and economic growth in sub-Saharan Africa: “a liability or an asset”. Journal of Business and Socio Economic Development, 34 – 48.

UN Women. (2022). Increasing the Demand for Women Workers in Sri Lanka’s Formal Manufacturing, Trade and Services Sector. UN Women.

Women in Leadership Roles. (2023). Salary.lk. Retrieved from Women in Leadership Roles: https://salary.lk/job-and-career/career-tips/women-in-leadership-roles

World Economic Forum. (2023). Global Gender Gap Report. WFE.

[1] https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/publications/annual_report,2022

[2] https://www.ugc.ac.lk,2020

[3] (Jennifer L. Solotaroff, George Joseph, Anne T. Kuriakose, and Jayati Sethi, 2020)

[4] International Labour Organization, 2016

Dilushika Piyumi Cabral

(Dilushika Piyumi Cabral is a development sector professional currently working for an International Development Finance organization of the Country. She’s a BSc. Finance (Special) degree holder with a first-class honor from University of Sri Jayewardenepura. Her dedication in continuous learning is evident through the attainment of a Master of Science in Business Economics specializing in Development Economics.

She is a Passed Finalist of Chartered Institute of Management Accountants (CIMA), United Kingdom specializing in Management Accountancy.

She has more than five years of post-qualifying professional work experience in well reputed local and international organizations as a business analyst and working for the National Financial Inclusion Strategy of the country, which was designed to improve the financial inclusion of Sri Lanka and enhance the living conditions of the people. Also, she is working as a part time lecturer at Jayasekara Management Centre of Sri Lanka for professional course subjects.)