Unemployment rate among college-educated youth aged 15–24 reaches 43%
India follows at 42%, Bangladesh at 36%
Japan and Singapore post rates of 4% and 8%
IMF cites skills mismatch between education and labor market
The problem of college graduates unable to find work is growing serious in parts of Asia. In Sri Lanka, more than four in 10 highly educated young people hold university degrees but remain unemployed — a rate that India nearly matches at 42%. The widening gap between what universities teach and what employers actually need has been identified as a key driver.
According to Sri Lankan outlet Adaderana and other media, the IMF said in the September issue of its journal Finance & Development that Sri Lanka's unemployment rate among college-educated youth aged 15 to 24 stands at about 43 percent, the highest in Asia.
India followed closely at about 42 percent, and Bangladesh reached 36 percent. By contrast, most other Asian economies posted rates well below 20 percent for the same demographic — Singapore came in at about 8 percent and Japan at just 4 percent.
In Sri Lanka, the employment challenge grows sharper with higher levels of education. The country's overall youth unemployment rate stands at about 22 percent — more than five times the roughly 4 percent unemployment rate across all age groups. When the lens widens to include college-educated workers of all ages, the unemployment rate drops to about 6 percent, underscoring that it is young graduates entering the labor market for the first time who face the steepest barriers.
The IMF identified a "skills mismatch" between education and the labor market as the main reason for high graduate unemployment in Sri Lanka and some other South Asian countries. Universities and training institutions, it said, are producing graduates whose competencies do not align with the skills employers actually require on the job.
The spread of AI and automation was also cited as a factor raising barriers to youth employment. While new technology can boost productivity and create jobs, the IMF warned that workers who lack the skills to adapt to technological change may find their chances of entering the labor market reduced rather than expanded.
Sri Lanka's rapid economic restructuring since its 2022 sovereign default adds another layer of difficulty. The country of about 23 million people defaulted after years of accumulated policy failures and a severe foreign exchange shortage, and has since been pursuing economic recovery under an IMF bailout program.
The IMF said that as economies undergo structural and technological change, highly educated young people may find it increasingly difficult to secure jobs that match their qualifications and skills — a problem that could weigh not only on youth employment but also on incomes and long-term economic growth.
As a remedy, the IMF called for stronger links between the education system and the labor market. It said universities and vocational training institutions must incorporate shifting employer demands into their curricula more quickly. Closer cooperation among universities, industry and vocational training providers — ensuring graduates leave with the skills employers need — is essential to narrowing the gap between educated young people and available jobs, the fund said.
sjy@heraldcorp.com
