Economic research and theory is quite clear on the ‘returns to education’: education is generally positively correlated with jobs and income levels.
But in Sri Lanka, that relationship seems to be dysfunctional – at least for women. The country has educated its women well, but translating education into employment has proved challenging. The female labour force participation has declined and a particularly severe gap exists between male and female employment among the educated.
Positive results in educating women
Sri Lanka’s efforts to promote women’s participation in education have been largely successful. Primary school enrolment rates are about the same for men and women and women have performed better than men at higher levels of education and this trend is continuing. For instance, in 2010, 58 percent of the women who sat for A-Levels were women and out of the students qualifying to enter university, 67 percent were women.
When studying, it pays to be a man
Unfortunately, gender equality in education has not translated into gender equality in employment. Despite having more educated women than men, Sri Lanka’s 30 percent female labour force participation rate is one of the lowest in the region and has also declined over the years. By contrast, 67 percent of Sri Lanka’s men participate in the labour force. This means only three out of 10 Sri Lankan working age women seek employment compared to about seven out of 10 Sri Lankan men.
To make matters worse, higher education seem to reward men better than women: unemployment is higher among educated women. As shown in Exhibit 2, the proportion of men unemployed decreases with more education they have but the proportion of unemployed women increases with greater education.
Over the last decade, the situation has got worse: the gap in employment between male and females who have A-Levels widened by 5.9 percent between 2002 and 2012 (Exhibit 3).
A mismatch in demand and supply?
What explains the high and growing unemployment among educated women? There are two possible explanations. One explanation is that the private sector is biased in its employment practices. The second possible explanation is a mismatch between the skills females acquire and employer requirements.
The difference between job creation in the private sector and public sector is striking. In 2012, the public sector hired 42,234 women while the private sector shed 10,037 female jobs (see Exhibit 4). In fact, 83 percent of new jobs in the public sector were filled by women.
The private sector accounts for the largest percentage of jobs in the economy, 40 percent, and the public sector accounts for only 15 percent. But it is the smaller public sector that is generating jobs for women.
The public sector is a more gender equitable employer; 57 percent of public sector employees are male and 43 percent are female. In the private sector, however, there is a very high degree of a gender disparity, 71 percent of employees are men and only 29 percent are women. The disparity in employment creation observed in 2012 shows that the public sector is moving towards greater gender parity and the private sector is moving towards greater gender disparity.
This phenomenon may be explained by the mismatch between the demand and supply of skills - females may not have the skills employers desire. Although female achievement rates are better than male rates at A-Levels and above, there is a high degree of bias in female education towards arts subjects. For example, 59 percent of female students do arts subjects for A-Levels compared to 40 percent of male students. Further, studies by the Education Ministry reveal that the employability of arts graduates is the lowest (31.5 percent), compared to management (65 percent), science (68.7 percent), agriculture (69.5 percent), medicine (89.9 percent) and engineering (95.1 percent).
Given that the majority of arts students are women, lower arts graduate employability can be the result of bias against the gender, bias against the subject or a combination of both. At present, however, the conclusion arrived seem to be that it is the subject that is reducing the level of employability not the gender. Although there has not been sufficient investigation into the gender bias, it is more likely that gender has a negative impact on the employability of arts graduates.
Finding jobs for educated women
Compared to many other developing nations, Sri Lanka has fared well in creating education opportunities for women. However, the country has failed to translate this into increasing participation of women in the labour market. Labour force participation rate of women is low and is declining and unemployment is high among educated women.
Sri Lanka already faces severe shortages in labour at all skill levels; so it cannot afford to let this trend continue. The country needs to find ways and means of increasing labour force participation by women in general and find jobs for educated women.
The insight identifies the problem and highlights possible explanations for it. But finding real answers needs further study. The private sector’s reluctance to employ women is worrying and the underlying reasons for this reluctance need to be investigated further. To ensure that the country and its women get equitable returns on their investments in education, it is important to address constraints that prevent women from playing a greater role in the economy.
(Verité Research provides strategic analysis and advice for governments and the private sector in Asia.