1 September, 2009 - The unemployment rate in Bhutan has jumped to 4 percent in 2009 from 3.7 percent in 2007, according to the labour ministry’s Labour Force Survey, 2009.

The jump translates to 13,000 unemployed people, of which around 10,500 are youth between the ages of 15 and 24. The rate of youth unemployment is now almost 13 percent, up from 9.9 percent two years ago. The worst hit is the 15 to 19 age group, consisting mainly of school dropouts, suffering a 20.1 percent unemployment rate.

The unemployment group shows that people dropping out of school at the high and higher secondary level are the most unemployed, with around 5,000 in total, more than the illiterate, who number around 3,900. There are also 500 unemployed graduates.

“The pattern of high unemployment in the early age groups indicates that these are the youth entering the labour market with a certain level of education, but lack the skills required for immediate employment,” says the report.   

Labour minister Lyonpo Dorji Wangdi said, “ The rate has gone up as projected and it’s not an abnormal trend, but now we have to change the trend and bring down unemployment rate to 2.5 percent by 2013, by creating jobs in various sectors like tourism, ICT, etc.”

He said that unemployment had been rising due to a largely youthful population, more number of educated students, rural-urban migration, saturation in government jobs, dormant private sector and mismatch between skills and the economy’s needs.

However, though still suffering higher unemployment compared to males, the good news is the shrinking gender gap in employment participation. The female participation in labour force has sharply increased from 53.9 percent in 2006 to 64.5 percent in 2009.

The study also shows that there is a higher rate of unemployment in the urban areas at 7.5 percent, compared to 3 percent in the rural areas. However, this is also explained by the fact that higher incomes in urban areas support more people, so people can study longer; while in rural areas, everyone has to work.

There is an overall growth in non-agricultural employment over the last two years. Agriculture and forestry still lead the way employing 204,400 or 65.37 percent of the labour force. This is followed by public administration (including defense) at 8.99 percent and social services 8.57 percent.

Majority of the employed, 51.77 percent, are within the family business or profession and around 22.47 percent as self employed workers, indicating that small-scale enterprises are the biggest job generators.

Meanwhile, 269,900 people above 15 years are illiterate, while 51,800 had only primary education, and around 70,000 people only high and higher secondary education. There are 5,600 graduates and 1,600 people with a master’s degree.

The survey also found 6,037 child labourers between ages 13-17, who worked for economic activity, of which more the half were not paid. The 20 dzongkhags also showed that 31,207 children had done domestic chores. There were 69 cases of children also working to pay off their parent’s debts, while 27 found the schools too far.

The report comes after a gap of two years, as the last report for 2008 could not be done due to budgetary complications.

The results of the survey was based on data collected from 7,769 sample households in 20 dzongkhags from 13 March to 13 May 2009.

• 4% unemployment rate in 2009 up from 3.7% in 2006

• 5.3% unemployment rate for women and 2.6% for men

• Youth unemployment rate shoots from 9.9% in 2007 to 12.9% in 2009

• Women participation in labour force increases from 53.9% in 2006 to 64.5% in 2009

• 325,700 economically active labour force

• 679,700 population of Bhutan as of May 2009

• Sex ratio at 98 males for 100 females