Greying without growing
View(s):Primitive modernity
Demographers often attribute this surge to what they call a “primitive birth rate paired with a modern death rate”. In pre-industrial societies, birth rates tend to be high, while in more advanced societies, death rates are typically low. Sri Lanka, during this transitional phase, uniquely exhibited both conditions simultaneously. The result: exponential population growth and the emergence of a distinctly large generation that continues to shape the country’s demographic and socioeconomic landscape.
Older people like this farmer couple live longer than previous generations.
Sri Lanka’s unusual population surge in the mid-20th century was largely driven by early advancements in public healthcare—both curative and preventive—as well as rising living standards under an expansive welfare system. These improvements led to a steep decline in mortality rates, while birth rates remained high until the late 1960s.
The children born during this baby boom matured into a sizable youth cohort by the 1970s, continuing through the early 2000s. Economically, this could have marked the most dynamic era in Sri Lanka’s history. A large, energetic working-age population offered a rare demographic window—one that could have propelled the nation toward rapid development and prosperity.
In theory, Sri Lanka should have ascended to high-income status by the 1970s. Yet, as history unfolded, this transformative potential remained unrealised.
Youth with arms
Instead of becoming a driving force for economic growth, Sri Lanka’s youth—both Tamils in the North and Sinhalese in the South—turned to armed conflict. This generation, nurtured within a welfare-oriented democracy, was marked by deep frustration and disillusionment, stemming from a scarcity of meaningful opportunities.
At the same time, the economy remained shackled by a stringent regulatory framework that stifled innovation and limited avenues for productive engagement. Aspirations soared while the economy shrank, leaving this disproportionately large youth cohort alienated and angry—a missed demographic dividend that turned into a political liability.
The elderly – one in four
Today, Sri Lanka stands at the threshold of another critical demographic transition. Its once-dominant youth population is rapidly ageing. According to the World Bank (2021), by 2036, over a quarter of Sri Lankans will be aged 60 or above.
The shift is already evident: the Asia-Pacific Population Trends Database shows that by 2023, the 60+ age group accounted for 17.2 per cent of the population. This transformation has been shaped by sharply declining birth rates since the 1970s, coupled with increased longevity and better healthcare.
As a result, the working-age population is shrinking, while dependency ratios are rising. The implications are stark: fewer individuals must shoulder the dual burden of economic productivity and elderly care as never being the case before.
This dynamic has placed mounting pressure on the country’s fiscal framework and growth. A narrow tax base must now support expanding elderly care, including pension obligations—threatening progress on fiscal consolidation. Without adaptive and forward-looking policy reforms, Sri Lanka risks entering a phase where demographic ageing outpaces its institutional readiness, jeopardising both economic stability and social welfare.
Another shock
Another alarming facet of Sri Lanka’s demographic transition is unfolding in the wake of its post-2022 economic crisis. From late 2021 to mid-2023, the country endured an intense inflationary surge, peaking at a staggering 70 per cent in September 2022. For nearly 20 months, prices soared while the purchasing power of ordinary citizens collapsed.
The irony is stark: inflation has subsided, and economic stability may be gradually returning, yet the real value of incomes has been decimated—about 60 per cent of real incomes erased by inflation.
And unlike macroeconomic stabilisation, income recovery demands sustained and inclusive growth, something Sri Lanka has yet to initiate in meaningful terms.
Crucially, the most vulnerable demographic in this crisis is the elderly. The losses they’ve incurred are irreversible. Unlike younger cohorts, they lack the time horizon to rebuild their financial security through future earnings. Their retirement savings—fixed deposits, pension funds such as the EPF and ETF—have seen their real value eroded, turning lifelines into illusions.
Younger generations may eventually benefit from renewed economic growth and rising incomes. But for the elderly, the window for recovery is rapidly closing. They are left bearing the deepest scars of the crisis—an intergenerational injustice amplified by Sri Lanka’s demographic ageing and fiscal fragility.
Sri Lanka’s exception
Another troubling dimension of Sri Lanka’s economic stagnation lies in its under-utilised labour force. While the current economic crisis has amplified setbacks, the roots of the problem run much deeper—anchored in longstanding structural deficiencies that have gone largely unaddressed.
Sri Lanka’s labour force is disproportionately small when compared to peer nations with similar population sizes. Of its 22 million citizens, only 8.5 million are part of the labour force. By contrast, the Netherlands—with a population of 18 million—has a labour force of 10 million, while Taiwan—with 23 million—has 11.5 million actively engaged.
The disparity becomes even more pronounced when examining labour force participation rates. Sri Lanka’s rate stands at just 49 per cent of the working-age population (ages 15–64), compared to 82 per cent in the Netherlands and 60 per cent in Taiwan.
Several structural factors explain this gap: (a) Extended duration of schooling, which delays entry into the labour market, (b) Early retirement age, curtailing productive working years and (c) Extremely low female labour force participation, driven by socio-cultural norms and lack of inclusive and flexible employment structures.
Too long in education
Sri Lankan children spend longer periods in public schooling and face extended gaps after national examinations, graduating 1–2 years later than their global peers. Students in state universities, too, are typically 3–4 years older than university graduates in comparable countries when they complete their degrees—delaying entry into the workforce and reducing overall productivity.
Equally troubling is the severely low female labour force participation, which stands at just 31 per cent, in stark contrast to 79 per cent in the Netherlands. Countries that adopt flexible and inclusive employment structures have seen much higher engagement from women in their economies.
Ironically, women constitute the majority of students in Sri Lanka’s educational institutions: about 57 per cent in Advanced Level classes and even a higher share of 70 per cent in universities. Yet their representation in the workforce is disproportionately low.
This suggests not only a vast pool of untapped talent, but also raises critical concerns about the efficiency of public investment in female education—investments that fail to translate into economic contribution.
Working versus not-working
It is clear from the above statistics, but it is bizarre that more than half of the working age population in Sri Lanka is not working – this is about 8.9 million in the age group of 15 – 64 years. How about the work and productivity of the working people, contributing to nation’s economy to thrive and prosper?
Out of the eight million employed, over two million people which is 26 per cent are occupied in the agriculture. This is not because agriculture is a lucrative commercial activity, but there are no jobs created in urbanised non-agriculture sectors – that is industry and services.
Over one million people are in the public sector, while the need for improving public sector efficiency and productivity has been a topical discussion under public sector reforms for a long time. Another one million or more people are said to be driving tuk-tuks, while their productive hourly engagement or the status of “under-employment” in an average working day. Moreover, what would be the career path development of a young school leaver choosing to be a tuk-tuk driver?
Sri Lanka has also emerged as a labour-exporting country, and this trend has accelerated in the aftermath of the recent economic crisis. Over the past three years, it is estimated that more than one million people have migrated abroad. Among them are skilled professionals—highlighted by the alarming departure of over 1,489 medical doctors between 2022 and 2024—underscoring a deepening brain drain.
Concluding remarks
In conclusion, it is not an exaggeration to say that not many people have been working and working productively in Sri Lanka compared to other countries with similar populations. However, ageing of the nation has not stopped. As a result of Sri Lanka’s unique demographic dynamics within an under-performing economic structure, the country is set to face the challenges of not being rich before becoming older.
(The writer is Emeritus Professor at the University of Colombo and Executive Director of the Centre for Poverty Analysis (CEPA) and can be reached at
sirimal@econ.cmb.ac.lk and follow on Twitter @SirimalAshoka).
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!