Sri Lanka’s labour force participation rate hits new low in 2023

• 2023 labour force participation rate contracts to 48.6% from 49.8% in 2022
• Male labour force participation dips to 68.6% while female participation falls to 31.3%
• In absolute terms, SL’s employed population declined by 137,821 to just above 8 million
• Service sector accounts for 48.4 percent of overall employment

• By Nishel Fernando

Sri Lanka’s labour force participation rate hit a new low in 2023, the recently published Labour Force Survey (LFS) annual bulletin highlighted.

In 2023, labour force participation rate declined to 48.6 percent from 49.8 percent recorded in 2022. Since 2021, labour force participation rate has remained below the 50 percent mark. 

The labour force participation rate is the percentage of the population that is either working or actively looking for work.

In 2023, the male labour force participation rate declined to 68.6 percent from 70.5 percent from a year earlier while the female labour force participation rate fell to 31.3 percent from 32.1 percent in the same period. 

Meanwhile, in absolute terms, the employed population declined by 137,821 to just above 8 million in 2023, with male and female employed population declining by 66,402 persons and 71,412 persons. 

Among industries, the service sector workforce grew by 47,445 persons while employment in both agriculture and industry sectors declined. The service sector now accounts for 48.4 percent of the overall employment, up from 47 percent a year earlier.

During the year, the unemployment rate remained unchanged at 4.7 percent.  However, female unemployment rate increased to 7 percent in 2023 from 6.5 percent in 2022, while male unemployment rate declined to 3.6 percent from 3.7 percent in the same period. 

The unemployment rate was highest in urban areas at 7.4 percent, followed by 7 percent in the rural sector and 4.8 percent in the estate sector.

Meanwhile, the youth unemployment rate continued to rise in the year. Youth unemployment rose from 16.2 percent in 2022 to 17 percent in 2023.

Indicating a rise in full-time employment, the number of people working 40 hours or above rose to 62.1 percent in 2023 from 60.3 percent a year earlier.

Labour Force Survey (LFS) is one of the most important regular surveys conducted by the Department of Census and Statistics.