An analysis of the nature of unemployment in Sri Lanka

Sri Lanka has a significant youth unemployment problem. Past authors have viewed unemployment as particularly high among the more educated, but once we control for sex, sector and age the positive relation between education and unemployment disappears for urban youth and is significantly weakened for rural youth. Moreover even the relation among rural youth is brought into doubt when we account for unemployment duration. Typical unemployment spells last four years or more, and duration is not related to education. Controlling for age, more educated youth have higher unemployment rates because they have left school more recently.