Women’s labour force participation has fallen from around 45% in 1990 to 32% in 2025 despite rising education levels, with caregiving burdens, labour market constraints, and skill mismatches identified as key barriers in a recent ADB-backed study.
Presenting findings from the Asian Development Bank (ADB)-supported report ‘Exploring the factors behind low labour force participation in Sri Lanka’ last week, University of Peradeniya Professor of Economics Prof. Dileni Gunewardena said that the country’s education system represented a major public investment that was not translating into equivalent labour market outcomes for women.
‘The taxpayer is investing money in educating people, so the taxpayer is really losing out when one half of the educated population is not joining the labour force,’ she said.
The findings were presented at a Serendipity Knowledge Program (SKOP) event in Colombo, organised by ADB, bringing together policymakers, academia, development partners, and private sector representatives to examine barriers to women›s economic participation. The event focused on female labour force participation as a key constraint on Sri Lanka’s economic potential, with discussions centred on structural barriers and exploring policy pathways to expand women›s economic possibilities.
The study highlights a persistent ‘Sri Lankan paradox’, where women outperform men in secondary and tertiary education, and yet remain significantly underrepresented in the labour market. It also finds that education was the strongest driver of labour force participation. Women with higher education qualifications are substantially more likely to find employment and secure formal sector jobs, especially in the public and private sector.
However, the report highlights that structural barriers limited this transition from education to employment. One of the most significant barriers is unpaid care work. The presence of a child under the age of six reduces the likelihood of female labour force participation by 57%, while women are also unlikely to enter formal private sector employment when children are present in the household.
The study also finds that women spend around four additional hours per day on unpaid domestic and caregiving work compared with men. This work therefore is equivalent to an 187 extra eight-hour workdays per year. The research Gunawardena presented underlined that the value of this unpaid work alone was around 12% of the GDP.
‘If you’re an employer out there looking for women to hire, just keep in mind they›re already doing another job.’
Beyond care responsibilities, labour market conditions and social norms are additional constraints, the report underlines. In higher male earnings within households, the female labour force participation was lower, reinforcing traditional breadwinner dynamics. Furthermore, married women, especially those with lower education levels, face more limited employment options, while widowed or separated women are more likely to work because of economic necessity.
The study also finds that weaker labour demand at the district level reduces Women’s participation, highlighting how job scarcity affects women disproportionately when overall employment opportunities are limited.
The report outlines a set of policy measures, including skills development through improved education pathways, vocational training, and digital literacy to enable access to formal employment. It also calls for the expansion of care systems to reduce unpaid care burdens that disproportionately fall on women.
In addition, the report also highlights the need for labour market reforms, including stronger enforcement of maternity benefits and proposals to shift maternity costs away from employers. It recommends introducing mandatory paternity leave to rebalance care responsibilities and banning discriminatory hiring practices, such as asking questions on marital status or children during recruitment.
‘It’s very simple and costless to just simply pass a law that says you cannot ask such questions at a job interview.’
Policy and international insights
Speaking at the event, ADB Country Director Shannon Cowlin noted that women continued to be concentrated in informal, low-paid, and insecure work, with limited access to childcare, skills development, and safe working conditions. Other barriers such as unequal caregiving responsibilities, limited digital skills, and transport-related safety concerns were also prominent.
‘Empowering women to participate fully in the labour force is not only a matter of equality, it is essential for inclusive economic growth and lowering poverty in Sri Lanka.’
She stressed that improving women’s labour force participation required more than isolated policy interventions, calling for structural transformation, investments in infrastructure and services, and progressive workplace practices. Moreover, a broader societal shift in how women’s work, mobility, safety, and economic agency are understood and valued was also essential, she said.
Offering international comparisons, University of Toronto Professor of Sociology and Public Policy Prof. Ito Peng said that countries such as Japan, South Korea, and Canada had increased female labour force participation through a combination of childcare and eldercare systems, parental leave policies, and employment regulations that reduced gender discrimination.
She noted that Japan and South Korea had expanded care infrastructure partly in response to demographic pressures, including ageing populations and declining fertility rates. She also advised that care policies must be matched with strong labour market reforms.
‘We need positive policies to build effective care systems for children and for older adults. And as well, we need strong employment policies and regulations to eliminate employer discrimination against women and to ensure equal wages for work of equal value,’ Prof. Peng said.