The Bhutanese Leading the way.
The youth unemployment rate remains high despite signs of overall stability in the national labour market, according to the latest Labour Force Survey (LFS) by the National Statistics Bureau (NSB).
The survey for the third quarter of 2025 reports an overall unemployment rate of 3.2 percent, while youth unemployment stands at 17.8 percent, which is more than five times the national average.
The 3rd Quarter Labour Force Survey was conducted in August 2025, covering 3,018 households across all 20 dzongkhags. Of these, 2,963 households participated, yielding a strong response rate of 98.2 percent.
The survey provides the most recent assessment of Bhutan’s employment landscape and captures both progress and persistent gaps within the country’s labour force.
According to the report, “In Quarter Three, 2025, the national unemployment rate stands at 3.2 percent, slightly higher than 2.9 percent in Quarter Two. Compared to the same quarter in 2024, the rate is 0.2 percentage points higher.”
While the minor increase is statistically insignificant, it highlights that Bhutan’s overall labour market remains relatively stable. However, this stability conceals the widening challenges faced by young job seekers.
The LFS points out, “While the overall unemployment rate indicates near full employment, youth unemployment remains a persistent concern.”
Of all unemployed persons actively seeking work, 44.2 percent were aged between 15 and 24.
“The youth unemployment rate stands at 17.8 percent, reflecting a 0.5 percentage point increase from the previous quarter,” the report notes. This means that young Bhutanese are five times more likely to be without work than the average adult, an imbalance that continues to reflect the difficulties many face in transitioning from education to employment.
The persistent gap also presents structural weaknesses in the economy, particularly in creating sufficient quality jobs for an increasingly educated youth population.
The report further states, “The unemployment rate is highest among younger age groups, peaking in the 20-24 years cohort. It remains above the overall unemployment rate until the 25-29 years age group, after which it declines steadily.”
The pattern indicates a predictable life-cycle trend, but the high concentration of joblessness among early career entrants also means that many young Bhutanese are struggling to secure their first job or gain relevant experience to remain competitive in the workforce. Education-related factors continue to dominate the reasons for unemployment.
The LFS states, “Among several cited causes, the major ones include recently completed studies (25.4 percent), lack of adequate qualification (19.9 percent), qualification mismatch (11.7 percent), and lack of experience (11.5 percent).”
These findings suggest that the issue is not necessarily a lack of interest among youth but rather a misalignment between education and the demands of the labour market.
In Bhutan, the challenge of qualification mismatch has been repeatedly highlighted in policy discussions.
Many graduates continue to pursue academic qualifications that may not directly translate into employment opportunities, while technical and vocational skills remain in shorter supply. The survey’s findings reaffirm the need for stronger coordination between education providers, the Ministry of Industry, Commerce and Employment (MoICE), and the private sector to ensure that training aligns with market realities.
The LFS also examined the duration of unemployment, revealing that a large proportion of job seekers face prolonged difficulties in securing employment. According to the report, “By duration of unemployment among the actively unemployed, 61.5 percent were unemployed for less than six months, while 38.5 percent were unemployed for six months or more. Approximately 18.6 percent of unemployed persons have been without work for more than one year,” classifying them as long-term unemployed. Despite these challenges, the report shows some encouraging trends in labour force participation.
“Compared to Q3, 2024, the labour force participation rose by 0.4 percentage points, indicating a year-on-year improvement in labour market engagement.”
The overall labour force participation rate stands at 65.5 percent in the third quarter of 2025, with male participation (74.2 percent) significantly higher than female participation (55.8 percent). The report also highlights that participation remains higher in rural areas (68.1 percent) compared to urban areas (61.1 percent).
While male participation in the labour force continues to rise, the gender gap remains substantial, highlighting the persistent barrier for women.
“A marked gender disparity persists: female inactivity stands at 44.2 percent, 18.4 percentage points higher than the male rate of 25.8 percent, reflecting continued gender gaps in labour force participation,” the LFS states.
According to the report, for many women, family and household responsibilities remain a primary reason for being outside the labour force, while education and training are the main reasons cited by men. In terms of employment distribution, the report found that agriculture remains the largest employer, engaging 42.7 percent of the employed population, followed by the services sector at 40.7 percent and industry at 16.6 percent.
Rural Bhutan continues to maintain higher employment rates primarily due to the dominance of self-employed and family-based agricultural work.
