Women,work and ageing: Rethinking Sri Lanka’s economic and social future

by Ifham Nizam

Sri Lanka risks losing a critical opportunity to sustain economic growth as its population ages, fertility declines and skilled workers migrate overseas, with low female labour-force participation further limiting the country’s ability to respond to a shrinking workforce. The United Nations Population Fund (UNFPA) Sri Lanka says the challenge calls for a fundamental rethink of the country’s economic and social policies, including how women’s unpaid care responsibilities, young people’s family aspirations and the financial security of older citizens are addressed.

With women accounting for 70.6 percent of Sri Lanka’s economically inactive population in 2024, the country cannot afford to leave such a substantial pool of potential workers outside productive employment while demographic pressures intensify. Only 28.9 percent of women participated in the labour force that year, compared with 67.4 percent of men.

In responses to questions from the Sunday Island, UNFPA emphasised that Sri Lanka’s changing population structure should not be treated as a crisis in itself. Rather, it reflects decades of progress in healthcare, education, life expectancy and access to voluntary family planning. The real test is whether the country can adapt its economic model, labour market, social protection systems and care infrastructure to these new realities.

The implications extend well beyond employment and economic growth. Rising demand for healthcare and long-term care, inadequate retirement protection, outward migration and the growing difficulty young people face in starting families are interconnected challenges that require a coordinated policy response.

Sri Lanka is still benefiting from a demographic bonus, with its working-age population larger than the dependent population of children and older people. But this window of opportunity will not remain open indefinitely. UNFPA argues that the country must use it to strengthen productivity, widen women’s access to decent employment and prepare institutions for a society in which people live longer and family structures continue to change.

The challenge of an ageing population

Sri Lanka’s demographic transition is gathering pace. Around 18 percent of the population is now aged 60 or above, while the country’s fertility rate has fallen to approximately 1.3 children per woman. Together, these trends point towards a future in which the proportion of older people rises while the relative size of the working-age population gradually declines.

The transition is not unique to Sri Lanka. Countries across the world are experiencing longer life expectancy and smaller families. However, the speed of change and the country’s economic circumstances make preparation particularly important.

An ageing population can place increasing pressure on public expenditure, healthcare services, pension arrangements and families caring for older relatives. At the same time, a smaller workforce could make it more difficult to sustain economic growth unless productivity improves and more people are able to participate in productive employment.

UNFPA’s position is that population ageing should not be approached simply as a problem of numbers. The central issue is whether institutions are equipped to support people throughout longer lives while ensuring that the economy can generate sufficient income and public revenue.

Sri Lanka’s demographic bonus provides an opportunity to prepare. A relatively large working-age population can contribute to growth, savings and investment, but only if people have access to productive work and the skills required by a changing economy.

The challenge is to convert that opportunity into lasting economic gains before the age structure changes further.

An analysis using National Transfer Accounts data from 2016 estimated that demographic change alone could require an additional Rs. 76 billion in public consumption expenditure by 2037. The same analysis indicated that higher labour productivity could increase aggregate labour income by Rs. 872 billion by 2037 compared with a scenario in which demographic change was considered without those productivity gains.

These estimates illustrate the importance of productivity in responding to demographic pressures. They also suggest that Sri Lanka’s policy response should go beyond simply encouraging people to have more children. Investment in skills, technology, healthcare, education and decent employment can help the country make better use of its available workforce.

Women and the untapped workforce

One of Sri Lanka’s most immediate opportunities lies in increasing women’s participation in paid employment.

In 2024, female labour-force participation stood at 28.9 percent, compared with 67.4 percent for men. Women represented 70.6 percent of the economically inactive population, and 50.6 percent of economically inactive women identified household responsibilities, including childcare and elder care, as a reason for not participating in the labour force.

These figures point to a major economic challenge that is closely connected to social policy. Many women who could contribute to the economy remain outside paid employment because the demands of caring for children, older relatives and other family members are difficult to reconcile with formal work.

Increasing female labour-force participation is, therefore, not merely a question of equality. It is also an economic necessity as the population ages and the working-age population comes under pressure.

UNFPA’s approach highlights the need to recognise unpaid care work and reduce the barriers that prevent women from entering or remaining in employment. Affordable childcare, accessible elder-care services, flexible working arrangements and workplaces that accommodate family responsibilities could help more women pursue paid work.

Employers also have a role to play by improving workplace conditions, strengthening protection against discrimination and making it easier for women to return to employment after childbirth or periods spent caring for family members.

The issue is especially significant for young women. Unemployment among women, aged 15–24, has been recorded at 30.6 percent, indicating that many young women face substantial obstacles even before family responsibilities become a factor.

Better access to education, vocational training, digital skills and employment opportunities could help address this problem. However, training alone will not be sufficient if workplaces remain difficult to access or if women continue to carry a disproportionate share of unpaid care responsibilities.

Sri Lanka must also reconsider the way it measures economic contribution. Unpaid household work is essential to the functioning of society, yet it is often overlooked in conventional measures of economic activity. Recognising its value would help policymakers design more realistic employment, social protection and care policies.

The objective should not be to force women into paid work, but to ensure that those who want to work have a genuine opportunity to do so without being constrained by inadequate services or unequal family responsibilities.

Migration and the future of economic growth

Outward migration presents another challenge to Sri Lanka’s demographic and economic outlook.

The departure of skilled and working-age people can reduce the domestic labour supply, weaken particular professional sectors and place additional pressure on those who remain. The consequences can be especially serious when trained professionals leave sectors already facing shortages.

Migration, however, is not inherently negative. Sri Lankans working overseas contribute through remittances, international networks, new skills and experience. Migration can also provide individuals and families with opportunities that may not be available at home.

The policy challenge is to ensure that migration takes place through safe and fair channels while making Sri Lanka a country in which people have compelling reasons to build their futures.

That requires more than discouraging people from leaving. Decent employment, competitive career prospects, reliable public services, opportunities for professional advancement and confidence in the economy all influence decisions about whether to remain in the country.

For young people, the ability to find stable employment and plan for the future can be as important as the availability of jobs themselves. Uncertainty over income, housing costs and family responsibilities can make long-term decisions increasingly difficult.

Sri Lanka must, therefore, connect its migration policies with broader strategies for economic development, skills retention and employment creation. At the same time, it should maintain links with its overseas workforce and create opportunities for returning migrants to contribute their experience and expertise.

A sustainable response would recognise migration as part of a wider global labour market while addressing the domestic conditions that encourage skilled workers to seek opportunities elsewhere.

Why young people hesitate to start families

Falling fertility is often discussed as though it were simply a matter of changing personal preferences. In reality, decisions about whether to have children are shaped by economic circumstances, relationships, housing, employment security and access to childcare.

Many young adults may want to start families but feel unable to do so. High living costs, uncertain employment, the expense of raising children and difficulties balancing work with family life can all influence reproductive decisions.

UNFPA’s Demographic Futures Survey, which reached 108,926 internet-connected young adults, aged 18–19, across 73 countries and territories, including Sri Lanka, found a general desire for two children. Such findings underline the importance of distinguishing between the number of children people would like to have and the number they ultimately feel able to raise.

Sri Lanka’s experience must be understood within this broader context. A low fertility rate does not necessarily mean that young people no longer value family life. It may also reflect the practical barriers they encounter when considering parenthood.

UNFPA and the University of Colombo are conducting a study, examining fertility desires, intentions and behaviours in Sri Lanka. The research is expected to contribute to a better understanding of the factors shaping family decisions and the gap that can emerge between aspirations and outcomes.

The findings could help policymakers move beyond assumptions and design measures that respond to the actual concerns of young people.

Policies that support families need to address the conditions in which decisions are made. Affordable childcare, parental leave, secure employment, housing opportunities and a more equitable distribution of care responsibilities can help people reconcile their family aspirations with their economic circumstances.

Such measures can also benefit the wider economy by enabling parents, particularly women, to remain in employment and by reducing the pressure on families to choose between earning an income and caring for children.

The goal should not be to prescribe a particular family size. It should be to create conditions in which people can make decisions about parenthood freely and realistically.

Retirement security and the cost of longer lives

As life expectancy increases, ensuring financial security in old age becomes a more pressing concern.

Only about 30 percent of Sri Lanka’s workforce is covered by a formal pension arrangement. Many workers, therefore, face the prospect of financing a lengthy retirement with limited savings or without a regular pension income.

For some employees, provident fund benefits provide an important source of retirement savings. However, a one-off payment may not be sufficient to meet living expenses, healthcare costs and other needs over a retirement that could last many years.

The situation is particularly challenging for people who have spent much of their working lives in informal employment, where access to structured pension contributions and other employment benefits may be limited.

As the older population grows, the country will need to examine how retirement income can be made more secure without placing unsustainable pressure on public finances.

This includes strengthening social protection, improving access to suitable savings arrangements and considering how workers in informal employment can be better covered. Financial literacy and advice on managing retirement savings could also help people prepare for longer lives.

Healthcare and long-term care must form part of the same discussion. Older people may require continuing medical treatment, rehabilitation, assistance with daily activities or specialised residential care. When formal services are limited, these responsibilities frequently fall on family members, particularly women.

A stronger care system would help older people maintain dignity and independence while reducing the burden on families. It could also create employment opportunities in healthcare, community support and professional care services.

Ageing should not be treated only as a fiscal burden. Older people possess knowledge, experience and skills that can continue to benefit society. Policies that support healthy ageing, lifelong learning and opportunities for older people to remain economically or socially active can help make longer lives a source of strength.

Reproductive choice must remain central

Debates about low fertility can sometimes lead to calls for governments to encourage or pressure people to have more children. UNFPA’s approach places individual rights and reproductive choice at the centre of the discussion.

Demographic policy, the organisation argues, should not undermine people’s freedom to decide whether and when to have children or how many children to have. Efforts to address fertility decline must, therefore, avoid coercive measures and instead focus on removing the barriers that prevent people from realising their reproductive intentions.

This distinction is important for Sri Lanka. A policy that concentrates exclusively on increasing birth rates may overlook the economic and social reasons people delay or forgo parenthood. It may also fail to address the needs of those who choose to remain child-free or who cannot have children.

A rights-based approach recognises that individuals and couples should have access to accurate information, appropriate healthcare and voluntary family-planning services. It also recognises that decisions about parenthood are personal and cannot be reduced to targets set by the state.

At the same time, governments have a legitimate role in creating an environment in which families can thrive. Affordable childcare, parental support, decent work, healthcare access and social protection can help people make choices without being driven by financial insecurity or inadequate services.

The challenge is to support people rather than dictate their decisions.

Preparing for a different demographic future

Sri Lanka’s demographic transition requires a coordinated response across economic planning, labour policy, healthcare, education, migration and social protection.

Increasing productivity will be essential, but productivity gains must be accompanied by measures that enable more people to participate in the economy. Women need fair access to decent employment, young people need realistic opportunities to build secure lives, and older citizens need protection that reflects the prospect of longer retirements.

The country must also recognise that demographic change affects regions and communities differently. Rural areas, urban centres and sectors facing labour shortages may have distinct needs. Reliable population data and research into family intentions, migration patterns and labour-market participation will, therefore, be important in shaping effective policies.

The findings of the UNFPA–University of Colombo study could help inform this process by identifying the factors that influence reproductive decisions in Sri Lanka. Such evidence should be considered alongside labour-market data, pension coverage, healthcare requirements and the changing distribution of unpaid care work.

Equally important is the need to bring demographic considerations into long-term development planning. Policies should not be designed in isolation, with employment measures separated from childcare, retirement arrangements disconnected from healthcare, or migration strategies divorced from the availability of decent jobs.

Sri Lanka’s demographic transition is neither an automatic economic disaster nor a challenge that can be solved by increasing births alone. It is a structural change that calls for institutions to adapt.

The country still has an opportunity to benefit from its working-age population, improve productivity and build stronger systems of care and social protection. But that opportunity depends on decisions taken now.

The central question is not simply how many people Sri Lanka will have in the future. It is whether the country can create an economy and society in which people of all ages can contribute, families can make their own choices, women have equal opportunities and older citizens can live with dignity and financial security.