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Skill Training

Employment and Participation in South Asia: Challenges for Productive Absorption

Abhilaksh Likhi's picture

It’s a formidable task to describe the labor market in South Asia. The region’s eight countries vary widely in size, ranging from less than one million people each in Bhutan and Maldives to 1.2 billion people- about three quarters of South Asia’s population- in India. There is also diversity in stages of development, economic structures, social and cultural features. On the whole the economies of the eight countries in the region are essentially rural as well as agricultural and still unable to capture informal production activities of many individuals.

South Asian countries will add 1 million to 1.2 million new entrants to the labor force every month for the next two decades. They will further contribute about 40 percent of the total new entrants to the global working age (15-64) population. It goes without saying that creation of productive jobs (with jobs defined to include all wage work and self employment) will be the most dependable way out of extreme poverty for the South Asian  region that is home to more than forty percent of the world’s  absolute poor. According to an United Nations survey, the region’s current population of 1.65 billion will increase 25 percent by 2030 and 40 percent by 2050. Given the regions’ demographic dividend in terms of a youthful population, the working age population is projected to increase even more – 35 percent by 2030 and by 50 percent by 2050.

Among the five of the large countries in the region, employment growth since 2000 was highest in Pakistan followed by Nepal, Bangladesh, India and Sri Lanka. The total employment in South Asia (excluding Afghanistan and Bhutan) rose from 473 million in 2000 to 568 million in 2010, creating an average of just under 800,000 new jobs a month. Besides, in all countries except Maldives and Sri Lanka, the largest share of the employed are the low end self –employed (involved in small scale enterprises with no more than five workers/family enterprise workers). Nearly a third of workers in India and a fifth of workers in Bangladesh and Pakistan are casual laborers (who incidentally have the highest poverty rates). Regular wage or salaried workers represent a fifth or less of the total employment. In the region as a whole, 55 percent of the 1.04 billion working age population is employed.

Thus, with over 490 million young people aspiring to join the work force in the region, there is a dire need to identify major challenges and put in place effective policies that can enable productive absorption of the young in high quality jobs.