Skip to main content


Log in

The Labour Market Experience of University Graduates in Sri Lanka

  • Article
  • Published:
Higher Education Policy Aims and scope Submit manuscript


Graduate unemployment has been a major socio-politico-economic problem in the small open economy of Sri Lanka for the past 35 years. The nature of the problem, causal factors and policy responses are examined in this paper with a special focus on the role of higher education within a highly competitive and knowledge-based economic environment. The evidence reveals that the problem of graduate unemployment is not entirely a university problem. It is mostly a structural issue that requires a positive response from both demand and supply sides of the labour market. On the demand side, it involves high economic growth promoted through institutional and policy support, while on the supply side, universities need to be more dynamic and market oriented in the delivery of graduate output.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Figure 1
Figure 2
Figure 3
Figure 4
Figure 5

Similar content being viewed by others


  1. Department of Census and Statistics, Quarterly Labour Force Survey, unpublished data.

  2. For more details, see Gunawardena (2005), Jayaweera (2005) and Aturupana (1996).

  3. Of the existing labour laws, the following have been identified as major impediments on investment: (a) Termination of Employment of Workmen (special provision) Act No. 45 of 1971, and its amendments; (b) Wages Board Ordinance No. 5 of 1953, and its amendments; (c) Industrial Disputes Act No. 43 of 1950, and its amendments; (d) Payment of Gratuity Act No. 12 of 1983, and its amendments; (e) Maternity Benefits Ordinance No. 32 of 1939, and its amendments; (f) Employment Provident Fund Act No. 15 of 1958 and its amendments; (g) Workmen's Compensation Act No. 19 of 1934, and its amendments and (h) Trade Union Ordinance No. 14 of 1935, and its amendments.

  4. The investment rates among the government, public sector corporations and private sector were estimated to be around 3.8, 2.2 and 22.6%, respectively in 2006. Central Bank of Sri Lanka (2006).

  5. For details, see Gunawardena (1993, 1999) and Tharuna Aruna (1999).

  6. Due to the stigma attached to being a factory worker.

  7. Rs. 3,000/- per month in 1998/1999 (US$1=Rs. 72.11).

  8. In broad terms, it refers to effective communication, personal and interpersonal skills, positive attitudes to change, etc. For some interesting discussions on the term ‘core skills’ and its applicability to HE sector, see Wolf (2002).


  • Arunatilake, N., Jayasuriya, S. and Kelegama, S. (2001) ‘The economic cost of the war in Sri Lanka’, World Development 29 (9): 1483–1500.

    Article  Google Scholar 

  • Aturupana, H. (1996) ‘Unemployment among educated women in Sri Lanka’, Department of National Planning, Ministry of Finance and Planning, Colombo.

  • Bowen, A. (1990) ‘The unemployment problem in Sri Lanka’, Unpublished manuscript, World Bank, Washington, DC.

  • Central Bank of Sri Lanka. (2006) ‘Annual report, 2006’, Colombo.

  • Chandrasiri, S. (2003) ‘Financing of university education’, Journal of Higher Education 45: 91–108.

    Article  Google Scholar 

  • Chandrasiri, S. (2004) ‘Competitiveness, comparative advantages and utilization of labour in Sri Lanka’, National Association for Trade Union Research and Education (NATURE),

  • Department of National Planning. (2002) ‘Employment and unemployment of youth in Sri Lanka’, Country Study, February.

  • Dickens, W.T and Lang, K. (1996) ‘An analysis of the nature of unemployment problem in Sri Lanka’, Journal of Development Studies 31: 620–636.

    Article  Google Scholar 

  • Glewwe, P. (1987) ‘Unemployment in developing countries: economist's models in light of evidence from Sri Lanka’, International Economic Journal 1 (4): 1–17.

    Article  Google Scholar 

  • Gunawardena, C. (1993) ‘Employer expectations and equity in education in Sri Lanka’, International Journal of Educational Development 13 (2): 125–130.

    Article  Google Scholar 

  • Gunawardena, C. (1999) ‘The notion of competence and its applicability in higher education in Sri Lanka’, Presidential Address, Sri Lanka Association for the Advancement of Education, Section F, 3 October.

  • Gunawardena, C. (2005) ‘Gender equity in higher education in Sri Lanka (1979–2004)’, A paper presented at a Seminar on 25 Years of University Education: The Past, Present and the Way Forward organized by the University Grants Commission (15 December 2004), Colombo, Sri Lanka.

  • Heijke, H. and Koeslag, M. (1999) ‘The labour market position of university education and higher vocational education in economics and business administration: a comparison’, Education Economics 7 (3): 259–276.

    Article  Google Scholar 

  • Jayaweera, S. (2005) ‘Overview of higher education in Sri Lanka’, A paper presented at a Seminar on 25 Years of University Education: The Past, Present and the Way Forward organized by the University Grants Commission (15 December 2004), Colombo, Sri Lanka.

  • Lakshman, W.D. (2004) ‘Youth Unemployment: An Exploratory Study’, in S. Kelegama (ed.) Economic Policy in Sri Lanka: Issues and Debates, New Delhi: Sage Publications India Pvt Ltd. pp. 271–299.

  • Lin, Z., Sweet, R. and Anisef, P. (2003) ‘Consequences and policy implications for university students who have chosen liberal or vocational education in Canada: labour market outcomes and employability skills’, Higher Education Policy 16: 55–85.

    Article  Google Scholar 

  • Rama, M. (2003) ‘The Sri Lankan unemployment problem revisited’, Review of Development Economics 7 (3): 510–525.

    Article  Google Scholar 

  • Seers, D. (1971) Matching Employment Opportunities and Expectations: A Programme of Action for Ceylon, Geneva: ILO.

    Google Scholar 

  • Tertiary and Vocational Education Commission, 1998. (1998) Labour Market Information Bulletin, Vol. 4/1998, December.

  • Tertiary and Vocational Education Commission, 2006. (2006) Labour Market Information Bulletin, Vol. 01/06, June.

  • Tharuna Aruna. (1999) ‘An unpublished report on Tharuna Aruna’, submitted to National Planning Department. Ministry of Finance and Planning.

  • Wolf, A. (2002) Does Education Matter?, London, England: Penguin Books Ltd.

    Google Scholar 

Download references


The author thanks two anonymous referees of this journal for offering valuable comments and suggestions on an earlier version of the paper.

Author information

Authors and Affiliations


Rights and permissions

Reprints and permissions

About this article

Cite this article

Chandrasiri, S. The Labour Market Experience of University Graduates in Sri Lanka. High Educ Policy 21, 405–423 (2008).

Download citation

  • Published:

  • Issue Date:

  • DOI: