More exports not creating formal jobs in Sri Lanka

ECONOMYNEXT- More exports are not increasing employment or formalisation of jobs in Sri Lanka, but give higher wages to existing workers, a study by the World Bank and the International Labour Organization said.

"In Sri Lanka, if there was a 100 US dollar increase in exports per worker, average income would increase by 206 rupees at 1999 price levels," Gladys Lopez-Acevedo, a lead economist at the World Bank said.

"If the value of exports increases by 100 US dollars per worker, average annual wages would increase by 975 rupees per worker," she said at the launch of the study ‘Exports to Jobs’, held at the Institute of Policy Studies in Colombo.

The wage gain from exports was tested for the years between 2002 and 2013.

While wages increased, the study found no evidence of producers hiring more workers.

"Export shocks in Sri Lanka operate primarily through wages rather than employment," the study said.

Unlike the rest of South Asia, exports also did not increase formality of jobs in Sri Lanka.

However, the study noted that this may be due to a lack of data.

In Sri Lanka, formal jobs were mostly created in domestically oriented industries such as construction, transportation, and communication, and wholesale and retail trade between 2002 and 2015. (Colombo/Feb26/2019-SB)





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