WHY INCREASING FEMALE LABOUR FORCE PARTICIPATION IS CRITICAL FOR SRI LANKA

Sri Lanka presents a familiar but increasingly costly paradox.

- BY Cathrine Weerakkody

The country has near-universal female literacy, strong educational outcomes for women, and better health indicators than many peers in South Asia.Yet only around 31-32 percent of women participate in the labour force, far below global averages and well below what Sri Lanka’s human capital profile would predict. In the context of fiscal fragility, population ageing, and repeated climate-related shocks, this gap is no longer a social concern alone. It is a macroeconomic constraint.

From a growth perspective, Sri Lanka can no longer afford to underutilise half of its potential workforce. Demographic ageing, sustained outward migration of skilled labour, and limited fiscal space mean that future growth will depend less on capital accumulation and more on labour supply and productivity.

Benefits

Raising female labour force participation would expand the effective workforce, lift household incomes, support domestic demand, and broaden the tax base. International evidence suggests that narrowing gender gaps in employment can generate sizeable and durable gains in output, particularly in middle-income economies facing demographic transition. For Sri Lanka, this is not an abstract benefit. It is central to stabilising public finances and sustaining recovery.