Population aging and the labor market : the case of Sri Lanka

Sri Lanka's population is predicted to age vary fast during the next 50 years, bringing a slowdown of labor force growth and after 2030its contraction. Based on a 2006 representative survey of old people in Sri Lanka, the paper examines labor market consequences of this process, focusing on retirement pathways and the determinants of labor market withdrawal. The paper finds that a vast majority of Sri Lankan old workers are engaged in the informal sector, work long hours, and are paid less than younger workers. Moreover, the paper shows that labor market duality carries over to old age: (i) previous employment is the most important predictor of the retirement pathway; (ii) older workers fall into two categories: civil servants and formal private sector workers, who generally stop working before they reach 60 because they are forced to do so by mandatory retirement regulations, and casual workers and the self-employed, who work until very old age (or death) due to poverty and insufficient income and who stop working primarily because of poor health; and (iii) the option of part-time work is used primarily by workers who held regular jobs in their prime age employment, but not by casual workers and self-employed.Labor Markets,Health Monitoring&Evaluation,Labor Policies,Work&Working Conditions,

Will Formula-Based Funding and Decentralized Management Improve School Level Resources in Sri Lanka?

Using the experience of the Educational Quality Inputs (EQI) Scheme in Sri Lanka, the paper examines the distributional aspects of formula-based funding and efficiency of decentralized management of education funds in a developing country setting. The study finds that the EQI fund distribution is largely pro-poor, with the exception of expenditure at the collegial level. The study finds that allocating more funds to more disadvantaged schools alone is insufficient to reduce disparities as the inability of schools to fullly utilize the funds holds back progress. The study findings support the hypothesis that qualified principals, adequate levels of human and physical resources, and state-level monitoring and support is needed for the success of education management at the school level. The study highlights the need to better use information collected from the schools on the EQI scheme to simplify and improve its implementation and effectiveness.Education finance, Sri Lanka, formula-based funding, decentralized management of schools

The Impact of Population Aging on the Labor Market: The Case of Sri Lanka

Sri Lanka’s population is predicted to age very fast during the next 50 years, bringing a slowdown of labor force growth and after 2030 its contraction. Based on an original, 2006 representative survey of old people in Sri Lanka conducted as a part of this study, the paper examines labor market consequences of this process, focusing on retirement pathways and the determinants of labor market withdrawal. The paper finds that a vast majority of Sri Lankan old workers are engaged in the informal sector, work long hours, and are paid less than younger workers. Moreover, as one of the first findings of its kind, the paper shows that labor market duality that characterizes most developing countries carries over to old age: (i) previous employment is the most important predictor of the retirement pathway; (ii) older workers fall into two categories: civil servants and formal private sector workers, who generally stop working before they reach 60 because they are forced to do so by mandatory retirement regulations, and casual workers and the self-employed, who are forced to work until very old age (or death) due to poverty and who stop working primarily because of poor health; and (iii) the option of part-time work is used primarily by workers who held regular jobs in their prime age employment, but not by casual workers and self-employed.population aging, labor supply of old workers, labor demand for old workers

Lost in transition: linking war, war economy and post-war crime in Sri Lanka

Scholars continue to draw attention to the link between the war economy and post-war crime. The majority of these studies are about cases of civil war that ended with peace agreements. Sri Lanka’s civil war ended with a military victory for the state armed forces; thus, it can help shed new light on the above link. Situated in the war economy perspective, this article investigates the dominant types of crimes reported from post-war Sri Lanka and the mechanisms linking them with the war economy. The culture of impunity, continued militarisation and enduring corruption are identified as key mechanisms through which the war economy and post-war bodily and material crime are linked. It suggests, although the ‘victors’ peace’ achieved by state armed forces was able to successfully dismantle the extra-legal war economy run by the Liberation Tigers of Tamil Eelam, it was responsible for promoting criminality in the post-war period. Overall, this points to the urgency of breaking away from legacies of the state war economy in the post-war period, before introducing programs of longer term political and economic reform

The Economics of Tobacco in Sri Lanka

This paper describes trends in tobacco use in Sri Lanka, assesses the economic contribution of the industry (jobs, earnings, tax revenues and trade balance), and analyses the relationship between demand for cigarettes and prices and incomes, looking at different socioeconomic groups. It uses the estimated elasticities to simulate the likely impact of a tax increase on prices, government revenues and on demand, expenditures and tax burdens of different socio-economic groups

Population aging and labour market paricipation of old workers in Sri Lanka

Sri Lanka\u27s population is predicted to age very fast during the next 50 years, bringing a potential slowdown of labour force growth and after 2030 its contraction. Based on a large and detailed survey of old people in Sri Lanka, conducted in 2006, the paper examines labor market consequences of this process, focusing on employment outcomes of old workers and the reasons and determinants of labour market withdrawal. The paper finds that a vast majority of Sri Lankan old workers are engaged in the informal sector, work long hours, and are paid less than younger workers. Moreover, using hard evidence, it shows that labour market duality characterizing most developing countries carries over to old age: (i) previous employment is the most important predictor of the retirement pathway(ii) older workers fall into two categories: formal sector workers, who generally stop working before age 60 because of mandatory retirement regulations, and casual workers and the self-employed, who, due to poverty, work till very old ages and stop working primarily because of poor healthand (iii) the option of part-time work is used primarily by former formal sector workers

Tax reforms in Sri Lanka: will a tax on public servant improve progessivity?

The Sri Lankan government implemented tax reforms in 2011, including removal of the tax exemption given to public servants and reduction of personal income tax rates in order to improve tax compliance from pay-as-you-earn (PAYE) tax payers. This study evaluates the 2007 and 2011 tax systems in order to examine the effects that taxing the income of public sector employees has on total tax revenues and the tax base. The study also compares the distributional effects of the different tax systems. Study further conducts simulation analyses to assess the most progressive means of achieving the 2007 tax revenue levels. Implications for tax evasion are also examined under different tax systems. The study finds that the 2011 tax reforms reduce tax revenue by 48 percent relative to the structure of income taxation in 2007. This decline in tax revenues occurs even though income taxes are extended to public sector workers because the 2011 tax reforms reduced the rate of income taxes across the board and increased the tax-free threshold. Our simulations show that tax revenues would have risen if the reforms were limited to introducing income taxes to public servants. The resulting (hypothetical) tax system would also have been more progressive than the tax structure resulting from the 2011 reforms. The study evaluated the distributional impacts of modifications to the 2011 tax system which would increase tax revenue to their level in 2007. More specifically, the present study finds that the most progressive way to attain this tax revenue target would be to increase tax rates on taxable income by 6 percentage points and to lower the tax-free threshold from LKR 600,000 to LKR 400,000