Unemployment rate hits an all-time high of 5% in 2020

The report shows that 32% of the population in Bhutan is economically inactive

Amid the Covid-19 pandemic, the country’s unemployment rate rose to 5% in 2020 and about 32% (157,114 persons) of the working-age population are economically inactive.

The findings are according to the Labour Force Survey (LFS) conducted in November and December 2020 and released on April 2, 2021.

The report states that a little less than two-thirds, 62.6% of the economically inactive population is found in rural areas and 37.4% are in urban areas. This translates to an unemployment rate of 5%, which is the highest to date. The unemployment rate for female is 6%, which is higher than that of male with 4.1%.

Further, unemployment is more of an urban phenomenon with 10.1%, which is four times higher than that of rural areas which has 2.7%.

According to the LFS, a total of 331,222 persons are classified as economically active or in the labour force. Out of these, 16,660 persons were without work, seeking and available for work during the reference period.

The unemployment rate in the urban areas is reported to be four times higher than that of the rural areas.

Among dzongkhags, Thimphu has the highest unemployment rate of 12.3%, followed by Paro with 9.4%, Chhukha at 5.8%, and Punakha 5.2%, while Lhuentse and Mongar Dzongkhags have reported the lowest unemployment rate with 0.6% and 1.2%.

The overall youth unemployment rate is estimated at 22.6% or 6,922 persons. Out of the total unemployed youth, about 38.7% are male and 61.3% are female.

“The high unemployment rate in 2020 could be attributed to the impact of the COVID-19 pandemic on businesses and the service sector. The rate would have been much higher had it not been for the timely intervention by the government under the leadership of His Majesty The King,” the report states.

However, according to the LFS, the working-age population is estimated at 488,336 persons; 233,844 male, and 254,492 female. Of the total working-age population, 331,222 persons are economically active out of which 51.2% are male and 48.8% are female.

Of the total economically active population, 68.4% reside in rural areas, while a little less than one-third 31.6% live in urban areas.

The Labour Force Participation Rate (LFPR) for Bhutan is estimated at 67.8%. The LFPR for the rural area of 69.7% is higher than the urban area of 64.0%. The male LFPR is higher in the urban area of 73.3% as compared to their rural counterparts of 72.1%; while the female LFPR is higher in a rural area of 67.5% than in urban area of 55.7%.

Meanwhile, a total of 9,012 households were selected for the survey from 20 dzongkhags, out of which about 38% of 3,420 households were in urban and 62% of 5,592 households were in rural areas.

Meanwhile, the country’s employment rate is 95%. The employment rate for male is 95.9% and 94% for female. Of the total employed of 314,562 persons, 220,406 are in rural areas and 94,156 are in urban areas.

Lhuentse Dzongkhag has the highest employment rate with 99.4%, while Thimphu has the lowest of 87.7%.

By major occupational groups, “skilled agricultural, forestry and fishery workers” with 49.7%, employed the highest number of persons, while “clerical support workers” with 2.2% employed the lowest.

Employed persons working as “regular paid employee” of 28.6% accounted for the largest proportion of the employed persons, followed by persons working in agriculture as “family worker” of 27% and persons working in agriculture as “own-account workers” of 22.4%.

Out of the total employed persons, 42.4% are without any qualification, while about 16% have “lower and middle secondary” and 12.1% have “primary” level of education. About 8% of the employed persons have an education level of “bachelor’s degree and above”.

Among the total employed persons, the highest percentage is engaged in the agriculture sector with 49.9%, while the lowest is in the industry sector with 13.5%. The share of employment in the service sector is 36.6%.

Comparing by age group, 14.7% are in the age range of 30-34 years, and it is closely followed by 14.4% in the age range of 35-39 years and 12.8% in 25-29 years.

Kinley Yonten from Thimphu