Unemployment rates have shown declining trend since 1990, but remain very high among educated youth.
Unemployment rate declined from 15.9 percent 1990 to 5.2 percent in 20081. The age groups, that worst
affected, are the 20-24 and 25-29 year groups. This is the age group which many people enter the labor force.
The majority of the graduates who come out of the universities are in the age group 25-29 years, with hardly
any work experience. This is one of the main reasons for their inability to gain suitable employment, especially
in the private sector. While the unemployment rate has continued to decline, graduate unemployment remains
high. Graduate unemployment in Sri Lanka is a major problem because a significant proportion of the able and
skilled workforce, which could contribute to the economic growth of the country, remains unemployed. It has
become common to see graduates from state universities staging protests in order to obtain jobs; however, the
jobs they ultimately get may or may not be sufficient to live.
The objective of this paper is to examine the reasons of unemployment among graduates. The findings endorse
that the skills mismatch among other things, is a major contributor towards increasing rate of unemployment
among educated youth. Attitude towards jobs such as “good” jobs and “bad” jobs is another contributor. Youth
look for a stable job with generous fringe benefits (including pensions), requiring low work effort.