The official unemployment rate is relatively low and declining but the issue is still gaining national importance and people are skeptical about official unemployment rates, The World Bank report, “Bhutan Development Update,” states.
The report points out that measurement issues due to a narrow definition of employment and underemployment, the limited information on underemployment, and low frequency (annual) of the labor force survey could be the factors, why unemployment issues in Bhutan is underestimated.
According to the Labor Ministry’s survey, the unemployment rate has dropped from 4% in 2009 to 2.1% in 2012. The Bhutan Development Update says the youth unemployment rate stands at 7.3% though it saw a decline from 12.9% in 2009.
The report lists reasons as to why Bhutanese are being skeptical of the official unemployment figures. One reason the report sets out is the non-inclusion of under-employment referring to those who work part time, but would work more if they could, in the Labor Force Survey. Thereby this was repealing the significance of underemployment particularly in farming sector, where 60% of ‘employed people’ are considered to be working in and where underemployment would actually be significant.
It also reflects the exclusion of labor force dropouts who are long term unemployed workers who may be discouraged and drop out of the labor force (the people of working age and below retirement age who are actively participating in the work force, or are actively seeking employment), thereby not being accounted for anymore in the labor force.
The report also points out the un-accounting of the aspirational mismatch where there is existence of mismatch between skills demand and skills supply, and preference of white collar jobs than blue-collar ones. The active involvement of factors like free health, free education, family ties encourages the unemployed to be more selective in seeking jobs, reports adds.
This group, the report states are people who might have no job and are actively looking for job but not willingly to work immediately are considered unemployed. This group may also be included in the under employed category by the labor survey if say they have worked for one hour the week preceding the annual labor survey.
For job safety, opportunity to study further and good benefits (as early retirement), the job seekers prefers jobs in the public sector. The report states the recent trends shows a change where employment is rising in the private sector.