A Note on the Regional Dimensions of Population and Unemployment in Sri Lanka Seneka Abeyratne & Tahani Iqbal Economic Affairs Division Peace Secretariat September 9, 2005
Introduction The objective of this note is to present a regional profile of population and unemployment in Sri Lanka. Figures 1 and 2 are based on data provided by the Registrar General s Office while Figures 3-6 are derived from the preliminary findings of the Consumer Finances and Socio-economic Survey 2003/04 (Central Bank). The profile includes data on the Northern and Eastern provinces, hence, it could be of considerable use to researchers and policy analysts. As the paper shows, there is significant variation in the unemployment rate across age groups as well as regions. It is clear therefore that these factors have to be taken into account when formulating future development strategies for Sri Lanka, especially in respect of identifying priority intervention measures, such as demand-driven, employment-generating schemes, for specific target groups or geographical areas. Population by Province The population of Sri Lanka (2003) is around 19.3 million. The Western province accounts for the largest share of the population (29%), while the Central, Southern and North Western provinces account for 13%, 12% and 11% of the total, respectively. The combined share of the Northern and Eastern provinces is around 14%. The share of population by province is shown in Figure 1, while a district breakdown is provided in Figure 2. Population Distribution by Age and Province The above-mentioned Central Bank Survey provides a breakdown of the sampled population by various sub-categories. The population distribution by age shows that the largest proportion of the population is between the ages of 15-34 years (32.3%). Age groups 0-14 and 35-54 years make up about 26% of the population each and the older age group (over 55 years), about 15%. Population distribution by age is roughly the same in every province except the Eastern province where there is a larger proportion of the 0-14 age group (33.9%) and a smaller proportion of people over 55 years (10.3%). The Northern province distribution is very similar to the all-island distribution. (Figure 3.) Employment by Sector and Province The share of employment in the Agriculture, Forestry and Fishing sector (all-island) is 32.8%, but there is significant variation across provinces. The highest shares are in the Uva 1
and North Central provinces (63.7% and 50.9%, respectively). The Western province has the lowest share (9.3%). The relative shares corresponding to the Northern and Eastern provinces are 25.9% and 36.1%, respectively. (Figure 4.) These findings do not support the general notion that the share of employment in the above sector is very high in the North and East. The share of employment in the Industrial sector (all-island) is 25.4%, with the Western province having the highest share of 35.1% and Uva province, the lowest share of 8.9%. The Northern and Eastern provinces have relative shares of 17.2% and 16.0%, respectively, for the industrial sector, which are higher than what one would normally expect, given the recent history of conflict. The all-island share of employment in the Services sector is 41.7%. The Northern, Western and Eastern provinces have the highest shares at 56.9%, 55.6% and 47.8% respectively. Uva province has the lowest at 27.5%. The economies of the North and East appear to be mainly service-driven, hence, this sector needs to be given due attention in respect of future development strategies for the region. Unemployment by Province Sri Lanka has an unemployment rate of 8.9%, as estimated by the above-mentioned survey. The Southern and Central provinces have the highest rates (11.7% and 10.8%, respectively); while the Northern province has the lowest rate (5.8%). The Eastern province has an unemployment rate of 8.4%, which is slightly lower than the national average. Unemployment by Gender and Province The all-island rates are 14.2% for females and 6.3% for males. (Figure 5.) The overall female unemployment rate is hence more than double the overall male unemployment rate. The Eastern province has the highest proportion of unemployed women in the country (21.2%), but the corresponding proportion for men is only 3.9%. The Central province has an unemployment rate of 18.4% for women and 6.9% for men. The Southern province has a rate of 17.4% for females and 8.2% for males. The latter estimate is the highest for any province in respect of male unemployment. As the above figures show, the female unemployment rate is very much higher than the national average in certain areas, such as the Eastern, Central and Southern provinces. 2
The Sabaragamuwa province has the lowest proportion of unemployed females in the country (9.5%) and the Northern province, the lowest proportion of unemployed males (3.1%). The latter province has an unemployment rate of 12.5% for females, which is lower than the national average. Unemployment by Age and Province The Central province has the highest unemployment rate in the 15-18 age group (46%). Next comes the Southern province with 45.1%, followed by the Eastern province with 25.6%. The national average is 36%. By and large, unemployment rates in this age group are very high across the board, except in the Northern province, where it is 0%. (Figure 6.) The Southern province has the highest proportion of unemployed in the 19-24 age category (37.3%), followed by the Central and Eastern provinces (34.5% and 32.6%, respectively). The national average is 30%. By and large, the unemployment rate in this age group is much lower in the Northern province (14.6%) than in the other provinces. However, the Northern province has the highest percentage of unemployed in the 25-34 age group (13.4%). Next comes the Southern province (13.0%), followed by the Central province (9.3%). The national average is 8.9%. The Southern province has the highest proportion of unemployed among 35-44 and 45-54 year olds with 3.8% and 1.4%, respectively. The corresponding national averages are 2.1% and 0.8%, respectively. The above analysis shows that unemployment rates are much higher in the 15-18, 19-24 and 25-34 age categories than in the other age categories. The problem is most pronounced in the Central, Southern and Eastern provinces, as well as in the Northern province where the 25-34 age group is concerned. In terms of future targeted assistance, therefore, these age groups/geographical areas should be given high priority. The reasons why despite several decades of development assistance to Sri Lanka the problem of open unemployment (with young females experiencing much higher levels of unemployment than young males in all regions of the country, including the Western Province) remains unsolved need to be carefully examined. Since prospects of findings jobs 3
in the open market are limited for the educated youth, creative approaches have to be identified for resolving this major constraint. Income-generation through productive self-employment could well become a slogan of the future. Incentives for encouraging educated youth to develop entrepreneurial skills and undertake sustainable, market-driven income-generating activities need to be identified. This would require a holistic approach involving such components as credit or group credit (for micro, small and medium enterprises), training (skills development, business management, marketing strategies, etc.), technology transfer, and competitive marketing. The Government and the private sector need to work together in designing and implementing such schemes in order to ensure that they lead to the creation of sustainable and broad-based self-employment opportunities within the framework of regional specialization in the production of goods and services. To improve productivity through technological and institutional change should be the long-term objective of this exercise. Summary Conclusions The unemployment rate in Sri Lanka is 8.9%. The Southern and Central provinces have the highest rates (11.7% and 10.8%, respectively) and the Northern province, the lowest rate (5.8%). The unemployment rate in the Eastern province (8.4%) is slightly lower than the national average. The all-island unemployment rate is very much higher among females than among males (14.2% versus 6.3%). The Eastern province has the highest female unemployment rate (21.2%). Other regions with high unemployment rates among women are the Central province (18.4%) and the Southern province (17.4%). The corresponding rate for the Northern province is 12.5%. The unemployment rates are much higher in the 15-18, 19-24 and 25-34 age categories than in the other age categories. The Central province has the highest unemployment rate among 15-18 year olds (46%), the Southern province, the highest rate among 19-24 year olds (37.3%), and the Northern province, the highest rate among 25-34 year olds (13.4%). The corresponding all-island unemployment rates among these three age categories are 36%, 30% and 8.9%, respectively. 4
It is important to note the high unemployment rate among 25-34 year olds in the Northern province (i.e. the educated youth) as this represents a highly volatile age group vis-à-vis the ethnic conflict. The problem needs to be resolved through special schemes, such as vocational training linked to productive self-employment, targeted at this group. Incentives for encouraging educated youth in all parts of the island to develop entrepreneurial skills and undertake sustainable, market-driven income-generating activities need to be identified, given chronically high unemployment rates among this group. The high unemployment rate among women in general also needs to be viewed in this context, i.e. income-generation through productive self-employment. 5
Figure 1: Share of Population by Province 9% 6% 29% 11% 6% 12% 8% 6% 13% Western Southern Central Northern Eastern North Central North Western Uva Sabaragamuwa Source: Based on Demographic data from Registrar General s Office (2003) Figure 2: Distribution of Population by District 2,500 2,000 1,500 Thousands 1,000 500 0 Colombo Gampaha Kalutara Galle Matara Hambantota Kandy Matale Nuwara Eliya Jaffna Mannar Vavuniya Mullaitivu Kilinochi Batticaloa Ampara Trincomalee Anuradhapura Polonnaruwa Kurunegala Puttalam Badulla Moneragala Ratnapura Kegalle Source: Based on Demographic data from Registrar General s Office (2003) 6
Figure 3: Intra-Provincial Distribution of Population by Age 100% 80% 60% 40% 20% 0% Western Central Southern Northern (b) Eastern North Western North Central Uva Sabaraga- muwa All Island 0-14 15-34 35-54 Over 55 Source: Based on Preliminary Findings of Consumer Finances and Socio-economic Survey 2003/04, Central Bank. Figure 4: Sectoral Composition of Employment by Province 70 60 50 Percent 40 30 20 10 0 Western Central Southern Northern (b) Eastern North Western North Central Uva Sabaraga- muwa All Island Agriculture, Forestry and Fishing Industry Services Source: Based on Preliminary Findings of Consumer Finances and Socio-economic Survey 2003/04, Central Bank. 7
Figure 5: Unemployment Rate by Gender and Province 25 20 15 Percent 10 5 0 Western Central Southern Northern (b) Eastern North Western North Central Uva Sabaraga- muwa All Island Overall Male Female Source: Based on Preliminary Findings of Consumer Finances and Socio-economic Survey 2003/04, Central Bank. Figure 6: Unemployment Rate by Age Group and Province 50.0 45.0 40.0 35.0 30.0 Percent 25.0 20.0 15.0 10.0 5.0 0.0 Western Central Southern Northern (b) Eastern North Western North Central Uva Sabaraga- muwa All Island 15-18 Years 19-24 Years 25-34 Years 35-44 Years 45-54 Years Source: Based on Preliminary Findings of Consumer Finances and Socio-economic Survey 2003/04, Central Bank. 8