Unemployment rate hits 5% in 2020

According to the Labour Force Survey conducted in November and December 2020, the unemployment rate has increased drastically to 5%. An increasing trend in unemployment rate has been observed over the years except for the year 2019.

As per the report, the COVID-19 pandemic has had a major effect on jobs worldwide. Since the industry and service sectors remained closed, work prospects for the unemployed were significantly diminished. The overseas returnees and those laid off workers by the affected industries worsened the situation.

The tourism and hospitality industries were especially hard hit by the pandemic. Despite the fact that administrative records show a significant number of unemployed people, the International Labor Organisation (ILO) only classifies someone as unemployed if they fulfill three requirements at the same time: they must be jobless, seeking employment, and eligible for work if an opportunity occurs.

In 2020, the youth unemployment rate is projected to be 22.6 percent, almost double the rate of 11.9 percent in 2019. In terms of absolute figures, there are 6,922 unemployed youth who are actively looking for jobs in their communities.

The reported stated that the youth unemployment rate in urban areas (33.3%) is double than that of rural areas (15.1%). Thimphu has the highest youth unemployment rate (37.1%) followed by Paro (29.6%), Pemagatshel (27.8%), Sarpang (25.3%), Dagana (24.8%), Chhukha (24.2%) and Punakha (22.7%). While Monggar Dzongkhag has the lowest youth unemployment rate at 5.3%.

Among the males and females, the rates show wide variation amongst dzongkhag. In Thimphu, the rate is 41.0% for females and 31.7% for males. Likewise, in Paro the rate is higher for females (36.9%) than males (21.1%)

“The reasons for being unemployed, among several reasons cited, ‘recently completed studies’ (19.5%), ‘laid off due to covid-19 pandemic’ (19.0%), ‘lack of adequate qualification’ (16.0%), and ‘lack of experience’ (10.8%) are the major ones. The reasons for being unemployed vary slightly,” the report stated.

According to the survey, a total of 9,012 households were chosen from twenty dzongkhags, with 38% (3,420 households) living in urban areas and 62% (5,592 households) living in rural areas. The survey questionnaire was completed by 8,932 households out of a total of 9,012 households, yielding a response rate of 99.1%. The survey data was collected by a total of 124 enumerators and 20 supervisors.

The population of working age is projected to be 488,336 individuals, with 233,844 men and 254,492 women. There are 331,222 economically active people in the working-age community, with 51.2 percent of males and 48.8% of females. Rural areas account for 68.4 percent of the economically active population, while urban areas account for 31.6 percent.

About 32% (157,114 persons) of the working-age population are economically inactive; 59.1% are females, while 40.9% are males. 62.6% of the economically inactive population are found in rural areas and 37.4% are in urban areas.

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