Understanding the Gender Gap in the Workforce

Originally appeared on Groundviews, Daily Mirror and Lanka Business Online

By Thathsarani Siriwardana

The issue of female labor force participation in Sri Lanka has remained a subject of discussion for several decades, yet tangible progress in improving it has been elusive. As the country grapples with its most severe economic crisis since gaining independence,it is important to take a hard look at our labour force to maximize its potential in overcoming the economic crisis. 

Sri Lanka is approaching its last stages of its demographic dividend characterized by a significant proportion of its population falling within the working age bracket (typically aged 15-64) in relation to the dependent age categories,the aged and the children. According to the Asian Development Bank, Sri Lanka's working-age population is expected to reach its peak around 2027. This presents a unique opportunity for us to strengthen our economic prospects by using the right socioeconomic policy mix, similar to how the Tiger economies like Singapore, Hong Kong etc. have harnessed their demographic dividends to advance their economic growth. 

Importantly, a substantial portion of this working-age population comprises highly educated and women who are living longer. Hence necessary interventions must be made to harness their economic potential.

Current status of the labour market

According to the 2021 Labour Force Survey, Sri Lanka's total labor force comprises 8.5 million individuals, with 65% of them being male. The overall labor force participation rate (LFPR) in Sri Lanka hovers around 50%, revealing a significant gender gap that has persisted since the early 2000s. As of 2021, the male labor force participation rate in the country stands at 71%, whereas the female labor force participation rate is considerably lower at 31.8%. This enduringly low female labor force participation rate, spanning almost a decade, necessitates increased attention and intervention from the government. It represents an untapped potential within our economy that demands harnessing for the nation's benefit.

When examining the female labor force participation, it becomes evident that a significant proportion of females are employed in the estate sector, constituting 42.6% of the female workforce. In the year 2021, a substantial majority of the economically inactive population were females, accounting for approximately 73.3%. Interestingly, among these economically inactive women, 59.4% cited engagement in household work as their primary reason for not participating in the labor force. This sheds a light on household responsibilities as the main contributing factor, preventing women from entering the workforce.

Education status of the labour market
Sri Lankan women tend to achieve higher levels of education compared to men. However, this educational advantage hasn't  translated into higher levels of participation in the labor force. To illustrate this relationship between labor force participation and education, the chart below provides a clear visual representation of the situation.

This diagram highlights two important points. Firstly, it reveals that a significant majority of women who participate in the labor force (83.2%) possess degrees or higher levels of education. This suggests that women are more likely to apply for jobs that align with their skill set and education level. 

Secondly, it underscores a distinct contrast when it comes to men. Even if men have an education level of grade 5 or below, a substantial portion (65.7%) still actively contribute to the economy. This disparity suggests that women with lower levels of education face greater challenges or barriers when it comes to workforce participation compared to their male counterparts.

This statistic also serves as a clear illustration of the traditional societal norm of men being the breadwinner, which leads to men having higher labor force participation rates, irrespective of their educational levels. On the other hand, women, despite their advanced educational qualifications, may encounter societal pressures or constraints that discourage them from seeking or maintaining employment. Unemployment remains a significant challenge in Sri Lanka, with the highest rates observed among women holding education levels at Advanced Level and above. This represents a substantial untapped pool of potential in the Sri Lankan labor market.

Reasons for low Female Labour Force Participation despite having a high education level 

The low female labor force participation rate in Sri Lanka can be attributed to a range of socioeconomic factors. 

A primary factor that discourages women from actively contributing to the economy is the significant burden of care responsibilities they bear. This care work encompasses a broad range of household tasks, from cooking and cleaning to childcare and caring for the elderly. According to the 2017 Time Use Survey, women spent nearly four hours more per day on unpaid care work and domestic services compared to men. For many decades, there has been a prevailing societal stereotype that women are primarily responsible for managing households, while men are expected to be the breadwinners outside the household. This division of labor is a key reason why women with the qualifications and capabilities to pursue employment opportunities often choose to stay at home, while men even with lower levels of education enter the labor market.

Another significant factor is the existing legal barriers in Sri Lanka. The two prominent legal constraints are restrictions on night-time work and the absence of recognition for part-time employment. While these legal provisions may have initially aimed to protect women, they inadvertently discriminate by limiting their employment opportunities and earning potential. For example IT/BPM sector employment is affected by the 1954 Act which only permits women over the age of 18, to work till 8 pm. The current statutory regimes governing employee rights fail to recognize part time-work. This oversight leads to a reluctance by employers to hire part-time workers as they are entitled to the same benefits as full time workers.

Moreover, the absence of adequate social infrastructure, such as quality child care centers and comprehensive parental leave policies, contributes significantly to the low female labor force participation rate. Presently, in Sri Lanka, approximately 80% of child care centers are privately operated. This situation creates a barrier to accessing quality and affordable child care facilities, making it financially challenging for skilled women to participate in the labor force, as many opt to stay at home to care for their children due to these constraints.

As highlighted in an ILO report the presence of skill mismatch in Sri Lanka's labor market since the early 1970s contributes as another reason. This skill mismatch exists because the country's education system does not adequately prepare graduates with the skills required by the job market. There is a notable disconnect between the courses offered by universities and the competencies needed by the private sector. 

This mismatch also contributes as a reason for the high levels of youth unemployment and the prevalent issue of arts degree holders struggling to find employment. A staggering 43.9% of unemployed graduates possess degrees in the arts. Notably, the majority of arts degree holders are women. This situation underscores a disconnect between the demand and supply within the labor market. It suggests that the current education system is not adequately preparing graduates with the skills and qualifications needed to meet the demands of available job opportunities.

Addressing these barriers are vital to improving the labor force participation rates, especially among women.

Policy Recommendations

• Recognise part time work under the existing statutes and provide needed benefits such as annual leave and remove provisions which restricts women from working at night.

• Utilize local government mandates via by-laws to enact local legislation to set up standardized and regularized day care centers while encouraging Public-Private partnerships in providing care for children by utilizing existing infrastructure.   

• Introduce more courses and degrees which are required by the private sector. This should be specially done by focusing on arts graduates. 

The effectiveness of the aforementioned policies would be limited if we do not address the need for a shift in people's mindsets. While Sri Lanka has made progress in challenging gender stereotypes there is still much work to be done. Initiating change, particularly within the education system, presents a promising starting point. The prevailing patriarchal system can be challenged and dismantled through education, which has the power to instill in both men and women the belief that predefined gender roles are unnecessary.

The opinions expressed are the author’s own views. They may not necessarily reflect the views of the Advocata Institute or anyone affiliated with the institute.

Sexual harassment in the workplace: High time to address labour laws

Originally appeared on the Morning

By Akhila Randeniya and Chantal Dassanayake

In light of the economic crisis, increasing the female labour force participation is one way to unlock growth potential. We witnessed during the pandemic how economic conditions necessitated women to pursue additional means of income, from engaging in sex work to migrating in droves to engage in low-skilled labor.

There exist a multitude of reasons that prevent women from entering the workforce; the dual burden of care work and employment, harassment while travelling, and labour laws that discriminate based on gender are a few. Yet sexual harassment is something that is rarely discussed – let’s have the uncomfortable conversation that is usually brushed under the rug.

Multiple surveys highlight that a majority of women face sexual harassment in their workplaces, which could lead to a loss of working days, resulting in companies making massive losses. A survey conducted by International Finance Corporation (IFC) on nine Sri Lankan businesses show that almost 68% of the women who participated in the survey have experienced some form of workplace violence or harassment.

In addition, a survey conducted among garment factory workers highlights that almost 80% of women faced workplace harassment. A questionnaire administered by the International Labour Organization (ILO) in 2016 among 500 women, the majority of whom were unemployed, discovered that three-fifths of women would be willing to work if they were assured that they would not be vulnerable to sexual harassment in the workplace.

The survey conducted by the IFC on nine Sri Lankan companies stated that workplace violence and harassment towards men and women led to a loss of six working days each, resulting in a loss of $ 1.7 million in work hours. Given the present status of the economy, Sri Lankan businesses can no longer ignore this issue that disproportionately affects women.

Protections currently available to women

Unfortunately, sexual harassment in the workplace is not addressed under the existing labour laws in Sri Lanka. Several statutes do cover the offence indirectly, yet it seems to be insufficient as the cases only increase. The matter can be addressed either through criminal law or civil law proceedings in Sri Lanka.

Sexual harassment is criminalised under Section 345 of the Penal Code (Amendment) Act No.22 1995. It explains sexual harassment in the workplace to be words or actions used by a person in authority. The Penal Code requires victims to report cases of sexual harassment to the Police by way of a complaint. Such complaints are potentially followed by lengthy court proceedings, which require a high burden of proof.

It is estimated that the average time taken to conclude a High Court proceeding to be 10.2 years from the date of the crime. Untimely and lengthy procedures have been said to cause under-reporting of crimes, which suggests that realistically, the number of incidents could be worse than imagined. Hence why this is something that needs to be changed.

Addressing sexual harassment via criminal law alone is ineffective as the burden of proof is largely on the complainant. This is where civil law comes into play.

The Industrial Disputes Act No.43 of 1950 (IDA) allows for the private sector to take up cases of sexual harassment through civil law. The act provides swifter mechanisms to resolve work-related disputes which do not involve the Police and court proceedings. Under this act, work-related disputes can be expansively interpreted to include sexual harassment in the workplace, thereby allowing victims to seek justice.

Workers in the public sector have several avenues of redress when experiencing sexual harassment in the workplace. The courts have attempted to combat sexual harassment in the public sector in limited circumstances.

Pelaketiya v. Gunasekera ruled that sexual harassment within the public sector was a violation of the fundamental right to equality. Republic of Sri Lanka v. Abdul Rashak Kuthubdeen criminalised the demand of sexual activity as a bribe in exchange for public service.

Policy recommendations

The move to introduce a new bill criminalising sexual assault and all other forms of harassment by the Minister of Justice late last year was a commendable step, but the existence of laws was never the issue. It is the incredibly complicated and gendered mechanisms for reporting and redressing any sort of complaint that need to be changed.

On the other hand, slapping on a criminal offence rarely seems to prevent a social wrong. Perhaps rehabilitation and educating perpetrators and society to shift the narrative from blaming women should be considered.

While legal barriers do exist, the root of all this evil can be boiled down to power structures that allow perpetrators to continue their behaviour in the workplace. Clear and coherent communication channels need to be established for victims to voice out their truth.

Limiting this to the workplace however is not enough. Conversations on harassment cannot exist in the vacuum of the workplace. Women face it in all avenues of life, from walking home at night to worrying about taking public transport.

If we want the women of our country to take part in the workforce, the least we can do is ensure that they are protected while working. The current legislation is clearly insufficient to provide any form of protection that is meaningful.

It is imperative that the existing labour law regimes are improved upon to include avenues of complaint and timely resolution of such complaints. A unified system needs to be implemented so that victims from both private and public sectors can enjoy equal protection.

The opinions expressed are the author’s own views. They may not necessarily reflect the views of the Advocata Institute or anyone affiliated with the institute.

Why is OT work necessary for women in Sri Lanka?

Originally appeared on the Morning

By Sumhiya Sallay

‘Overtime work for women’ is a topic that is not touched upon much in Sri Lanka, however, it can bring an array of benefits to women and our economy. It can improve financial security by providing an additional source of income and provide the next generation of women and girls with more opportunities to work and increase economic participation and improve productivity. 

Given Sri Lanka’s current economic crisis, there is a dire need for a dual income role in lower-income and lower-middle-income households. As Sri Lanka navigates through this economic crisis, where high levels of inflation have significantly reduced the purchasing power of the public, one earner is no longer sufficient for a household. This is where the need for laws that provide more opportunities for women are needed. 

The freedom to choose a job, a place of work, and how long to work are all decisions that should be given to every employee, whether male or female. However, in certain private sector industries in Sri Lanka, female employees do not have the legal right to choose overtime work, while male employees can [1]. 

Legal safeguards needed for overtime work

It is important for a country to have laws that support women so that women are given the choice and freedom to work in order to support themselves and their families. The World Bank’s ‘Women, Business and the Law 2021’ report states that when economies are more equal, they become more resilient [2].

It also highlighted the need to safeguard women’s economic rights under the law [3]. When laws are discriminatory against women, it makes it much more difficult for them to remain in the workforce. Therefore, it is vital for countries to enable laws that are more supportive towards women. 

The report, which captures the laws and regulations that restrict women’s economic opportunities, indicated that Sri Lanka scored 65.6 out of 100 in the ‘Women, Business and the Law’ 2021 index. Overtime work restrictions are also among one of the various discriminatory laws identified in Advocata’s report on ‘Gender Discriminatory Labour Laws in Sri Lanka and Female Labour Force Participation’. 

In Sri Lanka, women above the age of 18 are not allowed to work for more than nine hours per day (45 hours per week) within a five-day workweek, with an exception provided for female employees employed in residential hotels, clubs, and other places of entertainment or in any shop situated at an airport where they may be employed until 10 p.m. under specific conditions [4][5]. However, male employees are entitled to work for up to 12 hours of overtime per week (on a five-day work week). This discrimination towards female employees prevents them from working overtime. 

Although a practice known as administrative relaxation exists where the law is relaxed to allow women to work overtime, it is not recognised by the law [6]. Due to this, issues arise where employees who have worked overtime are not provided compensation for the hours worked overtime by the employer. Therefore, not having a formal, legally recognised law or regulation for overtime work discourages employees from working overtime. 

Furthermore, having laws that are not supportive towards women, especially discriminatory overtime laws that prohibit women from working overtime prevents them from having an extra source of income. 

Benefits of enabling overtime work

Given the current situation in Sri Lanka, with the high inflation rates, more income generation is needed and increasing female labour force participation by having supportive laws will give women the opportunity to earn more and also be financially independent. In return, women can increase their household spending on items that will enhance a country’s growth prospects by changing spending in ways that benefit children’s nutrition, health, and education [7].

Overtime work can not only benefit female employees but also benefit employers as it increases productivity and contributes towards the overall economic development of a country. The economies of both developed and developing countries would greatly benefit from increasing female labour force participation if women participate in the labour force at the same rate as men, work the same number of hours as men, and are employed at the same levels as men across sectors [8]. 

Overall productivity will increase if employees’ skills and talents are used more fully. There are several studies that have been published on how much more productive an economy could be if it took full advantage of the potential of its women workforce [9].

As more women enter the labour force, economies have the potential to grow faster in response to higher labour inputs. Women’s supply of labour increases household incomes, which helps families escape poverty and increase their consumption of goods and services. 

In Advocata’s report on ‘Gender Discriminatory Labour Laws in Sri Lanka and Female Labour Force Participation,’ key reforms and recommendations that need to take place in order to allow women to work overtime are highlighted. 

These recommendations include removing the restriction on overtime work under the Shop and Office Employees (Regulation of Employment and Remuneration) Act No. 19 of 1954 [10] and introducing a regulation to allow women to work overtime. In order to support this regulation, we also recommended that certain guidelines be included within the law to prevent the exploitation of excessive overtime. 

References

• Shop and Office Employees (Regulation of Employment and Remuneration) (SOE) Act No. 19 of 1954.

• Women, Business and the Law 2021, (Washington: The World Bank, 2021).

• Women, Business and the Law 2022, (Washington: The World Bank, 2022).

• Subject to conditions under the Shop and Office Employees (Regulation of Employment and Remuneration) (Amendment) (No. 32 of 1984), Section 2A.

• Employment In Terms Of The Shop And Offices Employees’ Act Monograph No. 17 (Rajagiriya: The Employers’ Federation of Ceylon, 2016), 13.

• Employment In Terms Of The Shop And Offices Employees’ Act Monograph No. 17 (Rajagiriya: The Employers’ Federation of Ceylon, 2016), 13.

• Ana Revenga and Sudhir Shetty, ‘Empowering Women Is Smart Economics’.

• McKinsey Global Institute (MGI), ‘The Power of Parity: How Advancing Women’s Equality Can Add $12 Trillion to Global Growth,’ (2015).

• McKinsey Global Institute (MGI), ‘The Power of Parity: How Advancing Women’s Equality Can Add $12 Trillion to Global Growth,’ (2015).

• Shop and Office Employees (Regulation of Employment and Remuneration) (SOE) Act No. 19 of 1954, Section 3 (1)(3)(a).

Sumhiya Sallay is a Programmes Executive at the Advocata Institute. She can be contacted at thilini@advocata.org. The Advocata Institute is an Independent Public Policy Think Tank. The opinions expressed are the authors’ own views. They may not necessarily reflect the views of the Advocata Institute.

Taxes on Essential Products: Bringing The Debate Back to Where It Matters

Originally appeared on Colombo Telegraph, Citizen.lk, The Morning, Lanka Business Online and Daily Mirror

By Aneetha Warusavitarana

Sri Lanka’s exorbitant taxes on sanitary napkins had the media spotlight over the last few weeks - this is not a new issue. In 2018 the total tariffs on sanitary napkins was over 101.2%.  Since then we have seen some progress, with the tax being reduced from 101.2% to its current rate of 52%; a result of several tax revisions.

The 2020 budget revised down general duties for sanitary napkins to 15% and introduced a CESS tax of 15%, causing an uproar in social media and in parliament leading to fresh calls for the abolition of these taxes.  

Menstrual hygiene products are essential for girls and women, and this issue has put the interests of these consumers who want more variety and cheaper products against the interests of the local producers who want larger margins. Since the initial uproar last week, there have been claims that the local brands account for 95% of the local market and therefore import taxes do not have a bearing on the market price.  

Bringing the debate back to where it matters: impact on women

It is clear that for this issue, policy decisions have to be taken with the best interests of the consumer at heart - in this case, the millions of menstruating women. 

At the most basic level of analysis, when protectionist tariffs are placed on a good, it is the consumer who loses out. The tariffs will achieve two things: they will limit the range of products that enter the domestic market, and they will raise the prices of both imported products and locally manufactured products. How so? The inputs into the local production process are also taxed, which raises production costs, and therefore raises the final price of the locally manufactured product. Additionally, the tariff raises the price of the imported product, which allows local producers to raise their prices and keep substantial margins. In other words - tariffs cause both the locally produced goods and the imported goods to be sold at a higher price. 

These tariffs are also keeping more affordable options out of the market. At the time of writing, locally manufactured products can range in price (per pad) from LKR 11 to LKR 19. However, cheap imported alternatives are not available. For example, Indian supermarkets have products at the equivalent of LKR 5. The tariffs may not be deterring higher-priced imports from entering the market, but it could be possible that this is happening with more affordable imported options - it makes little sense to bring in a cheaper product if the tariff raises your costs to the point where you have to price the final good at the same price point as your more expensive product.

Will removing the tax only affect high-income earners?

An argument leveled against the removal of the tax has been that imported products are often out of reach of the average Sri Lankan woman, and as such has little relevance as a policy decision. This argument has also been coupled with the statement that as locally manufactured products exist, and women do purchase them - why should we care about bringing in imports? 

The example provided above makes it clear that removing the tax would actually bring more affordable products into the market. This is also where the importance of choice comes to play. Each woman will have different requirements at different points in their life. This is compounded by the fact that menstruation is often accompanied by pain and discomfort, which can range from mildly annoying to debilitating. In short, one size does not fit all when it comes to menstrual hygiene products. In response to this fact, the global industry has innovated - period cups, period underwear, reusable pads and more. These tariffs should be removed, and Sri Lankan women should also be given access to these choices. 

Economic Rents

By now it should be clear that there is only one winner, and it is not the millions of menstruating women. The basic explanation of the impact protectionist tariffs have is that they serve to benefit local producers, that are few in number. They shield them from the competition and allow them to price well above marginal costs. A classic case of ‘rent-seeking’ behaviour, where a company lobbies to secure itself protection in order to charge a higher price. The result is that the local consumer loses out. 

There is one area where the producer's complaints do have merits - that is the tariffs placed on their inputs.  Much of the input that goes into the production of sanitary napkins are also taxed.  The government should look into reducing these costs to help the local manufacturers stay price competitive.  

Given this, there is a clear call to reform - prioritise the requirements of women, and remove the taxes imposed on the final good and on the inputs into the production of these goods.

Aneetha Warusavitarana is the Research Manager at the Advocata Institute and can be contacted at aneetha@advocata.org or @AneethaW on Twitter. Learn more about Advocata’s work at www.advocata.org. The opinions expressed are the author's own views. They may not necessarily reflect the views of the Advocata Institute, or anyone affiliated with the institute.