SL loses out on GDP gains as unpaid care and wage inequalities clip female labour potential

• Unpaid domestic care burden valued at 14% of GDP, with women contributing a massive 12%
• IMF estimates a 21% boost to economic growth if gender parity in workforce is achieved

Prof. Dilini Gunawardana

By Nishel Ferando

Sri Lanka is severely compromising its macroeconomic growth by failing to bridge the gender gap in labour force participation, a deficiency deeply rooted in stark wage inequalities for unskilled formal workers and a disproportionate burden of unpaid care work.

Despite boasting high educational attainment and gender parity in early education, the island nation faces a glaring economic paradox where a vast reservoir of educated female talent remains entirely outside the formal economy. This structural failure not only limits household earning potential but also deprives the state of a substantial return on its heavy investment in free public education.

The wage disparities are particularly acute among unskilled formal workers and within the country’s estate sector. While the estate sector demonstrates a higher rate of female labour participation compared to urban and rural areas, it remains trapped in a low-income cycle, characterised by low digital literacy and a narrow occupational focus, restricted primarily to agricultural labour. 

In the broader informal and unskilled formal markets, women are consistently compensated at lower rates than their male counterparts for similar work.  This gap is further exacerbated by a statutory minimum wage framework that currently fails to provide an effective baseline. Currently set at Rs.600, the national minimum wage fails to bind effectively or offer meaningful economic protection for the most vulnerable segments of the workforce.

Compounding these structural wage inequalities is the invisible, overwhelming weight of unpaid domestic and care work borne almost exclusively by women. Recent empirical assessments value this unpaid domestic care burden at a staggering 14 percent of the national gross domestic product (GDP). Out of this total economic valuation, women contribute a massive 12 percent of GDP through unpaid labour, while men contribute a mere 2 percent.

In practical terms, this leaves women working the equivalent of 187 additional eight-hour workdays per year compared to men, effectively locking them into an uncompensated full-time role that precludes formal employment.

“The taxpayer is effectively losing out on the return on their investment when half of the educated population does not join the labour force,” noted researcher Prof. Dilini Gunawardana at the recently held Serendipity Knowledge Programme by the Asian Development Bank in Colombo. 

She stressed that institutional frameworks must adapt to recognise the pre-existing 

workloads of women. 

“If you’re an employer out there looking for women to hire, just keep in mind they are already doing another job,” Prof. Gunawardana added, pointing to the immense double burden that stifles female formal sector recruitment.

Economists argue that unlocking Sri Lanka’s full economic capacity requires aggressive policy interventions. Key recommendations include transferring the financial burden of maternity benefits from private employers directly to the state to eliminate hiring disincentives, introducing mandatory paternity leave and establishing robust rural childcare infrastructure.

Furthermore, updating the legal framework to restrict discriminatory interview practices and implementing a meaningful, binding minimum wage are cited as critical steps to protect 

unskilled workers. 

“If we have a minimum wage that actually binds, it will be the women who are supported,” Prof. Gunawardana emphasised, underscoring that closing the wage gap is fundamental to driving the country’s post-crisis recovery.