Understanding the Challenges and Constraints of Bhutanese Youth in Accessing Employment Opportunities Tshering Choki and Alvin Etang1 November 30, 2023 Poverty and Equity Global Practice, South Asia Region 1 Tshering Choki is the Director of Athang Training Academy, Athang Private Limited, Thimphu, Bhutan. Alvin Etang is a Senior Economist in the Poverty and Equity Global Practice of the World Bank. The report was prepared as a background paper for the Bhutan Poverty and Equity Assessment. The findings, interpretations, and conclusions of this paper are those of the authors and should not be attributed to the World Bank or its Executive Directors. The authors may be contacted at aetangndip@worldbank.org and choki@athang.com Executive Summary Youth unemployment is a prevalent global challenge, particularly significant in countries like Bhutan, where nearly half the population is below the age of 30. This research study focuses on understanding the challenges and constraints faced by Bhutanese youth, particularly women, in accessing employment opportunities. It highlights the importance of providing quality employment opportunities for youth and the potential economic benefits of increasing female labor force participation. The study aims to better understand the current situation and identify the specific challenges and opportunities in different economic sectors. For women, the research focuses on three key areas: the impact of restrictive social norms, constraints across various sectors, and women's engagement in income-generating activities and microenterprises. For youth, the study delves into understanding the drivers of economically motivated migration across the three economic sectors. The research questions are categorized into three main sections: labor force participation, job acquisition, and self-employment, seeking to unravel the complexities of constraints faced by women and youth. Utilizing a conceptual framework derived from the World Development Report 2012, the study explores the role of informal and formal institutions, as well as market dynamics in shaping employment-related outcomes for women in Bhutan. This framework, initially developed for gender equality, proves relevant in understanding societal conditions and individual outcomes for the youth cohort. Employing a qualitative approach, the study optimized on focus groups discussions with relevant stakeholders and key informant interviews across three distinct study areas: Thimphu (services), Chukha (industry), and Dagana (agriculture). The selection of these areas is aimed to address specific urban and rural issues. Both primary and secondary data, drawn from multiple reports, contribute to an inclusive analysis of youth and female unemployment. Unemployment challenges are linked to government systems, private sector growth, and the evolving education system's ability to equip youths with necessary skills. The study identifies a growing trend of promoting entrepreneurial skills in Bhutanese schools and colleges, reflecting in the education curriculum. However, challenges arise as the current youth generation navigates the dilemmas of acquiring practical skills independently. Gender-based disparities persist in education, with a notable gender bias in STEM subjects, influenced by societal expectations. The lack of inclusiveness in education facilities poses challenges for students with disabilities. Women employees, especially the working mothers, face challenges due to the absence of childcare facilities at workplaces. Despite efforts such as extended maternity leave, there is a need for more sustainable solutions to address fertility rates and support working parents. The study recognizes the impact of changing climatic conditions on women, especially in rural areas, and addresses the significant unpaid household and care work performed by women. 2 Concerns about out-migration and its economic implications, particularly in the tourism sector, are voiced by respondents. The study advocates for enhancing digital marketing capacities in agriculture, emphasizing the need for youth and female empowerment in this sector. It also sheds light on the emotional and societal challenges faced by the youth, including low self- esteem, social stigmas, and the impact of emigration on the economy. In conclusion, the study contributes valuable insights into the multifaceted challenges of youth and women in accessing employment opportunities in Bhutan. The recommendations derived from this research aim to inform policies that foster inclusive and sustainable development, addressing the identified issues to propel the nation toward its developmental goals. 3 Acknowledgments We would like to express our sincere gratitude to the following individuals and organizations for their invaluable contributions and support throughout the course of this research: Aum Kunzang Lhamu (DoEE, MoICE), National Statistics Bureau (NSB), The Acting Secretary, Government Technology (GovTech) Bhutan, Dr. Sonam Choki (NCWC), Mr. Pema Namgyal (General Secretary and member of Association of Bhutanese Industries), Mr. Tempa Gyaltshen, Ms. Dorji Lhamo (Royal University of Bhutan), Mr. Tashi Wangdi (Impact Hub Thimphu), Mr. Kinley Dorji (Druk Beer), Ms. Leki Wangmo (Bhutan Lottery Limited), Ms. Tenzin Choden (Chief, WPID, DWPSD, MoESD), Ms. Tshering Yangki (DoEE, MoICE), Mr. Chencho Wangyal (Karma Feeds), Mr. Kinley Namgay (Dzongkhag Agriculture Officer, Dagana), Members and Chairperson Daga Sanam Thuenkey Detshen (DSTD), Chairperson (Thuenpa Puenzhi Detshen), Youth Farmers Group (Tsankha), Their support, expertise, and collaboration have been instrumental for the success of this research endeavor. We are truly grateful for your time, insights, and dedication to advancing the knowledge in this field. We would also like to thank Ana Maria Munoz Boudet (Senior Social Scientist, World Bank) and Zain Chaudhry (E T Consultant, World Bank) for their valuable inputs on the behavioral implications of this study. 4 Table of Contents 1. Introduction ............................................................................................................................. 6 2. Statement of the Problem ....................................................................................................... 7 3. Research Objectives ................................................................................................................ 7 4. Research Questions ................................................................................................................. 8 4.1 Joining or staying in the labor force ................................................................................. 8 4.2 Finding a job ..................................................................................................................... 8 4.3 Accessing self-employment.............................................................................................. 8 5. Conceptual Framework ........................................................................................................... 9 6. Research Methodology............................................................................................................ 9 7. Findings and Discussion ......................................................................................................... 10 7.1 Educational setting ......................................................................................................... 10 7.2 Lack of adequate facilities and support for female employees ..................................... 13 7.3 Climate change and female unemployment .................................................................. 14 7.4 Government policies and interventions......................................................................... 15 7.5 Technological changes ................................................................................................... 18 7.6 Social challenges ............................................................................................................ 18 7.7 Impact on youth migration ............................................................................................ 19 8. Conclusion ............................................................................................................................. 20 9. Policy Recommendation ........................................................................................................ 20 References .................................................................................................................................... 23 1. Introduction Youths are a major component and a vital part of the economic workforce, making up a large portion of the labor force in many countries. In recent years, the youth population has been increasing rapidly throughout the world, which has brought both challenges and opportunities. The challenges and opportunities of the youth of this generation are unique as they are growing up in a world of unprecedented technology and connectivity, with access to vast amounts of information and the ability to communicate with people all around the globe. This generation’s youth are expected to be tech-savvy as well as socially conscious and aware of global issues. At the same time, they are dealing with complex social and economic issues and a changing job market. It is said that today’s youth are living in a VUCA, the world that is volatile, uncertain, complex, and ambiguous. Although youths are often portrayed as a potential group of productive people within the economy, most of them have fewer opportunities to access the labor market. They are often seen to be vulnerable in the workforce mainly due to their lack of experience and knowledge, inadequate job opportunities, absence of job security, and limited bargaining power. Several studies have acknowledged the gravity of the issue of youth unemployment and steps are being taken to improve access and development of skills of young people. Nonetheless, youth unemployment is still a major problem both in developed and developing countries. Growing youth and female unemployment is considered a major policy issue in both developed and developing countries as it has obvious implications for both economic welfare and economic growth. Youth and female unemployment is related to several issues such as economic, social, political, and environmental factors. Thus, addressing youth and female unemployment can improve economic productivity, political stability, and social cohesion. According to Klugman et al. (2014), youth and women employment promotes development through economic growth and increased participation, thereby leading to positive spillovers at the individual, family, and societal levels. With the introduction of the 2030 Sustainable Development Goals (SDGs) agenda, youth and female employment is interlinked to poverty reduction, gender equality, and income distribution which are crucial for achieving the SDGs. Several studies have examined the growing decline in youth and female employment. For instance, Neff, Sen, and Kling (2012, 196) investigated the sudden decline in female labor force participation in rural India and concluded that it could be due to the changing income effect affected by rising household incomes requiring women to withdraw from the labor force to attend to domestic duties and partly due to the education effect as more women in rural areas are now pursuing higher education and are not available for work. Similarly, using panel data analysis, Tasseven, Altaş, and Turgut (2016) found that the unemployment rate, gross domestic product per capita, and the fertility rate are positively associated with the female labor force participation rate in the Organization for Economic Co-operation and Development (OECD) countries. Within the South Asian region, the higher youth unemployment rate (YUR) has been due to a lack of appropriate skills through technical and vocational education and training (TVET) than the lack of jobs. According to Sudan (2021), despite providing training programs, skills mismatches are large in the context of new technological changes and innovations in the region. The issue of unemployment in Bhutan is primarily observed in the youth population rather than the overall workforce. In Bhutan, young individuals, especially females, face disadvantages when seeking employment. The 2022 National Labor Force Survey (LFS) Report reveals that the unemployment rate for 6 females is 7.9 percent, whereas it is 4.4 percent for males. Moreover, there has been a worrisome increase in youth unemployment, rising from 20.9 percent in 2021 to 28.6 percent in 2022. Over the years, this problem has persistently posed challenges, with youth unemployment fluctuating and reaching its peak in 2022 while hitting its lowest point at 7.2 percent in 2012. Upon analyzing various sectors, it becomes apparent that the agriculture sector, comprising crops, livestock, and forestry, remains a significant economic activity in the labor market. This sector employs approximately half of the total labor force, accounting for 49.2 percent, while its contribution to the country’s gross domestic product (GDP) is roughly 20 percent. The latest data provided by the Bhutan labor market (DWPSD 2023) show that it is always the young people who are out of work or who are in search of a job. Moreover, the disaggregated data reveal that female youths are more vulnerable to unemployment than male youths. This is mainly due to lack of access to resources, limited education and training opportunities, and workplace discrimination. The report also highlighted that, if females are not employed in a gainful livelihood source, they are not economically independent and become much more vulnerable to gender-based and domestic violence as they depend on their family, relatives, intimate partners, and spouses. Therefore, this study aims to contribute to a better understanding of the current situation, challenges, and constraints that women and youth face in accessing employment opportunities. 2. Statement of the Problem Providing quality employment opportunities is key for Bhutan as articulated in the 12th Five-Year Plan. Providing access to quality employment opportunities, especially for youth, is instrumental in achieving inclusive growth and more effective development outcomes. Research shows that increasing female labor force participation to similar levels as men could boost annual global GDP by 26 percent in 2025 compared with a business-as-usual scenario. Globally, the world is experiencing an unprecedented youth unemployment. According to the International Organization Report, the total global number of unemployed youths is estimated at 73 million in 2022, a slight improvement from 2021 (75 million) but still 6 million above the pre-pandemic level of 2019. Therefore, young people today face serious challenges across the globe when it comes to economic inclusion. Specific issues such as youth unemployment is a global development challenge and even more so in countries like Bhutan where about half of the population is below the age of 30. In this context, a better understanding of youth-specific issues can identify entry points for greater employment opportunities for youth in Bhutan and help shape actions for enhanced growth and sustainability. 3. Research Objectives The objective of the study is to contribute to a better understanding of the current situation, challenges, and constraints that women and youth face in accessing employment opportunities. Specific focus is given to understanding differences between challenges and opportunities across three main economic sectors: services, industries, and agriculture. In the case of women’s access to employment opportunities, three additional areas of focus have been identified: (a) the role of restrictive social norms in accessing employment; (b) constraints facing women’s employment in different sectors; and (c) women’s income- 7 generating activities and microenterprises. With regard to youth, the additional focus is on better understanding the drivers of economically motivated migration relating to the three economic sectors. 4. Research Questions To improve understanding of the constraints women and youth face, the research questions are broadly categorized into three sections: (a) joining or staying in the labor force, (b) finding a job, and (c) accessing self-employment. 4.1 Joining or staying in the labor force (a) Why women and youth are not joining the labor force and what are the reasons for women dropping out? Do the reasons differ across sectors? (b) When having a child, what are the roles and responsibilities of men and women in the family and what resources/support is available to facilitate women staying or going back into the labor force? How does this differ between rural and urban women across sectors? (c) How do societal expectations play into the decision of area of study, work, and role related to care responsibilities? (d) How does leaving the labor force affect aspirations and the sense of control over one’s life? How does staying out or dropping out of the labor market affect decision-making? 4.2 Finding a job (a) What are the societal perceptions of being unemployed that women and men face? (b) Where do women and youth find information about job opportunities and what channels work better? (c) When applying for a job, what do men and women, as well as youth, feel are the key determinants for actually getting a job or not? (d) What do they feel is missing in their education/experience/preparation to get a job? Do these issues differ across economic sectors? 4.3 Accessing self-employment (a) What factors play into the decision to seek wage employment versus self-employment for different groups? (b) What are the challenges men versus women versus youth face to be self-employed? What kind of self-employment is of interest for women and men as well as youth? (c) What would be needed to facilitate entering self-employment? What are the societal expectations and constraints that affect decision-making? 8 5. Conceptual Framework To identify and examine the challenges and constraints faced by youth and female employees in accessing employment opportunities, the study used a conceptual framework derived from the World Development Report 2012: Gender Equality and Development Analytical Framework. The World Bank’s conceptual framework identified three key domains of gender equality, which are interlinked: (a) endowments, (b) economic opportunity, and (c) voice and agency. While the framework was Figure 1: World Development Report 2012: Gender Equality and Development developed for gender Analytical Framework equality, it is also applicable and highly relevant to better understand the societal conditions and individual-level outcomes of the youth cohort. The focus was on the dimension of economic opportunities (particularly on employment). The study examined the role of informal institutions (norms, stereotypes, trust, sense of security/safety, and so on); formal institutions (legal restrictions, employer policies, access to daycare, and so on); and markets (access to finance, transport, daycare, other) as they relate to employment-related outcomes for women (and youth) in Bhutan. 6. Research Methodology A qualitative approach was used to study the challenges and constraints of Bhutanese youth (particularly women) in accessing employment opportunities. In particular, the study used key informant interviews (KIIs) and focus group discussions (FGDs). For the FGD, the group composition was carefully planned to create a non-intimidating environment for participants to give honest opinions. During the FGD consultation, participants expressed their hopes and concerns about the challenges, constraints, and opportunities, including views on government policies of accessing employment opportunities by Bhutanese youths and women. The topical questions that were used to guide the discussion are presented in Table 1. To facilitate satisfactory discussion, the research considered the optimum size for a focus group of up to eight participants. To develop a broader understanding of the different conditions and drivers of employment for women and youth in the country and to be able to contrast communities with the main income-generating 9 activities, three study areas were identified: Thimphu for the services sector, Chukha for the industry sector, and Dagana for the agriculture sectors. The selection of the three districts was also aimed to address specific issues pertaining to the urban and rural areas. Table 1: Topical questions used to guide focus group conversations Topic Questions Key issues and challenges • What are the pressing challenges for the government today to address youth and female unemployment? • Are there factors that prevent women and youth from accessing certain job opportunities? Government policies • Are you familiar with government policies in addressing youth and female unemployment? Compensation and working • Do you think youth and females are optimally compensated? environment • What steps should be taken to ensure the availability of a sufficient number of quality jobs? Opportunities • Are males and females given equal opportunities for employment? • What additional facilities do you think the workplace has to offer to retain youth and female employees? Similarly, for the KII, in-depth interviews were conducted with community leaders, professionals, and individuals who have first-hand knowledge on youth and female unemployment. A total of six FGDs with different groups and KIIs with different individuals representing the service, industry, and the agriculture sectors were conducted. For the KII, the survey also collected data on the demographic characteristics of the respondents and questionnaires related to their nature of employment and business activities. The thematic topics for the KII questionnaires were similar to the FGDs. In addition to the primary data collected through FGDs and KIIs, secondary data were also deployed to analyze the research findings. Secondary data were drawn from multiple reports that have tried to highlight youth and female unemployment in the country. The secondary data used in the analysis section were chosen based on the availability, relevance to the subject matter, and credibility of the existing texts. The main reasons for the rising number of youth and female employees are categorized in the next section. 7. Findings and Discussion The key findings based on the FGD, KII, and secondary data are provided in this section. 7.1 Educational setting Youth often hold the belief that formal education is necessary for obtaining white-collar jobs once they finish school, as this notion is strongly supported by their families and educational institutions. The trend of building an entrepreneurial or business mindset among students is picking up in schools and colleges in Bhutan, and it is also reflected in the education curriculums. However, the youth of the current generation did not have that opportunity and are now faced with the dilemmas and challenges of having 10 to learn these skills on their own. The education system has not been able to prepare young people for the changing world. The subjects taught in school differ from the practical skills and knowledge required in the real world. This has made it hard for young people to learn the skills that they need to be successful. According to some of the respondents, the education setting in Bhutan has been such that students were never told or encouraged by teachers to start businesses and they were never told that they can run a business for their livelihood, but many youths are trying to do so and find it challenging. Many tend to give up easily as they have not been trained or mentored to understand the various challenges and risks of doing business and how to manage the physical and mental stress of doing business in a competitive market. It has also been expressed that the education system in Bhutan does not provide students with disabilities equal opportunities. According to MoE and UNICEF (2020), while there has been a notable rise in the enrollment of students with disabilities in inclusive and special education since 2010, the enrollment statistics reveal substantial gender-based disparities as the boys outnumber the girls. The reasons stated are mostly associated with parents considering daughters to be more vulnerable to harassment or they do not recognize the significance of education for girls with disabilities. Respondents also state that, while inclusiveness in education is promoted in policies, it is not there in practice as the education facilities and infrastructure do not accommodate the needs of students with disabilities. According to MoE and UNICEF (2020), ensuring equitable access to the mainstream education system remains a major obstacle for students with disabilities, who are not only less likely to access educational opportunities but also more prone to dropping out in comparison to their peers without disabilities. Therefore, many youths with disabilities are deprived of higher education and are often excluded from the job market. The LFS Report 2022 also categorizes the disabled society under the economically inactive population, who neither worked nor were seeking/available for work during the survey period. Respondents also expressed gender disparity in education, mainly in the areas of science, technology, engineering, and mathematics (STEM) subjects. There are not many females pursuing careers in STEM mainly because of the mindset and stereotypical thinking that men are better in science and mathematics than women. Historically, the STEM area has always been dominated by males. The ‘masculine’ culture of STEM fields mostly encourages males to be confident and pursue careers in these areas. Females, on the other hand, may not always get the same encouragement, which can affect their confidence in pursuing STEM careers (Ren 2022). 11 Table 2: Percentage distribution of employed persons by gender in major occupation in Bhutan, 2022 Source: Bhutan Labour Force Survey 2022. With the prominence of digital technology in the economy, STEM education is widely regarded as crucial to national success. Although there are high prospects of employment in these areas, the rate of female student enrollment in STEM subjects is low compared to male students. According to respondents, the proportion of girls and boys in STEM subject streams reflects the deep-seated societal mindset that is highly gender biased, reflecting social expectations of women as caregivers. The computation thinking tests to check the aptitude of applicants for enrollment at the Gyalpozhing College of Information and Technology showed that girls performed poorly and therefore none of the girls were able to get admission to the college. Since this indicates that girls are also not doing well in logical/mathematical thinking, interventions are needed at the early stages of education to break that mindset. Table 3 and Figure 2 show that the STEM subjects in general are dominated by male students. Table 3: Student intake in 2022/23 in the colleges and institutions in Bhutan ALL TOTAL Sl. No. Institute Male Female Total Royal University of Bhutan 1 College of Language & Cultural Studies 478 626 1,104 2 College of Natural Resources (Klugman et al. 2014) (Sudan 2021) 450 597 1,047 3 College of Science and technology 632 253 885 4 Gedu College of Business Studies 913 708 1,621 5 Gyalphozhing College of Information Technology 159 125 284 6 Jigme Namgyel Engineering College 1,049 430 1,479 7 Paro College of Education 668 861 1,529 8 Samtse College of Education 414 336 750 9 Sherubtse College 719 809 1,528 10 Yonphula Centenary College 16 14 30 11 Norbuling Rigter College 109 127 236 12 Royal Thimphu College 528 675 1,203 Subtotal 6,135 5,561 1,1696 Khesar Gyalpo University of Medical Sciences 13 Faculty of Nursing and Public Health 271 239 510 14 Faculty of Traditional Medicine 46 37 83 12 ALL TOTAL Sl. No. Institute Male Female Total 15 Faculty of Postgraduate Medicine 34 27 61 16 Arura Academy of Health Sciences 29 76 105 Subtotal 380 379 759 Autonomous Institutes 17 Jigme Singye Wangchuk School of Law 30 57 87 18 Royal Institute of Management 146 144 234 Subtotal 176 201 321 Grand Total 6,691 6,141 12,832 Source: Royal University of Bhutan. Figure 2: Percentage of students worldwide enrolled in career programs Source: United Nations Educational, Scientific and Cultural Organization (UNESCO) Institute for Statistics. 7.2 Lack of adequate facilities and support for female employees Women typically face higher mortality, health risks, and lack of social protection. According to the respondents, one of the main challenges faced by women employees, especially those with small children, is the lack of childcare or support facilities at the workplace. Respondents are of the opinion that extension of the maternity leave from three to six months and the implementation of maternity allowance are not adequate to increase the fertility rate. Due to the lack of a conducive environment in most workplaces, not many working women want to have children. As expressed by some of the respondents, females are expected to meet many obligations. Besides their biological responsibility of bearing and nurturing children, they are expected to take care of their elderly parents, resulting in a higher attrition rate of female employees. This is especially true in the private sector, where female employees are either paid half the salary during maternity leave or expected to take leave without pay if the leave extends beyond the maternity period. The Bhutan Labour Force Survey report spanning from 2018 to 2021 indicates that individuals employed in urban areas with regular paid jobs tend to have higher earnings, while females earn less than males, and youth earn less than adults. In 2019, before the pandemic, the gender pay gap among employed 13 adults stood at 80.4, signifying that for every Nu 100 earned by a male adult, a female adult earned only Nu 80.4, and by 2021, this gap had decreased to 77.2 for employed adults, while employed youth faced a slightly larger gap of 87.7. Table 4: Gender monthly earning gap for youth and adults from 2013 to 2021 (Nu) 2013 2014 2015 2016 2017 2018 2019 2020 2021 Adult Male 11,719 14,935 16,679 19,250 16,309 14,858 18,210 19,262 20,293 Female 8,836 12,979 12,036 15,913 12,430 11,920 14,642 14,889 15,656 Earning gap (female to 75.4 86.9 72.2 82.7 76.2 80.2 80.4 77.3 77.2 male) Youth Male 7,337 10,682 12,158 14,041 12,200 11,420 13,522 14,818 15,866 Female 7,998 9,175 11,272 12,569 11,118 10,051 12,980 11,279 13,913 Earning gap (female to 109.0 85.9 92.7 89.5 91.1 88 96 76.1 87.7 male) Source: Labour Market Report 2023, Workforce Planning and Information Division (WPID), Department of Workforce Planning and Skills Development (DWPSD), Ministry of Education and Skills Development (MoESD), Royal Government of Bhutan (RGoB). For those in the civil service, the welfare support of Nu 10,000 for childbirth is considered as just a token or a quick-fix answer and not a solution for addressing the long-term challenges of raising children. There has to be a sustainable way with a long-term vision as these challenges faced by females also contribute to the rise in the aging population of the country. Respondents expressed that workplaces could encourage female participation by providing incentives in terms of addressing practical gender needs such as functional creche services with nurses or facilitators who are professionally trained to look after children when the parents are working or providing elderly care centers, as majority of the women spend time looking after the elderly at home. One of the concerns regarding employment challenges raised by the females in the industry sector is underrepresentation of females within their own organization as well as by the concerned government authority. Females without sufficient resources and confidence to voice their concerns face discrimination at the workplace and the lack of necessary facilities or benefit rights. Respondents felt that they are not well represented by competent authorities. The respondents shared that it would immensely benefit women in the industry or any sector if they have a support service to help with legal representation to mitigate or address the unfair challenges faced by females at the workplace. 7.3 Climate change and female unemployment As per the (National Commission for Women and Children, 2020) there is strong visibility of gender differences in Climate Change vulnerability, participation in Climate Change decision making and action, and diverse levels of benefit-sharing. The changing weather patterns have led to natural disasters, impacted agriculture production, change in wildlife behavior patterns further contributing to human- wildlife conflicts. Therefore, it has been expressed that women’s workload have increased more than men’s and that climate change impacts women adversely. For instance, respondents shared their view that changing climatic conditions are affecting females, especially in rural areas as they have to travel more to fetch water due to the drying of water sources, or the increased health risks, especially with the spread of vector-borne diseases like malaria and dengue fever in warmer climates. Women, as the natural 14 caregiver of the household, end up with additional responsibilities when family members fall ill. All these responsibilities limit their ability to engage in income-generating activities.According to the National Commission for Women and Children 2020, women in Bhutan perform 71 percent of unpaid household and care work. . Because of all their roles and responsibilities, rural women are more vulnerable to the effects of climate change, and they are more affected due to climate-related disasters. It has been expressed that females leadership should be promoted and their communication skills need to be enhanced to be competent and strengthen their voice and decision-making abilities in climate change related issues. 7.4 Government policies and interventions For the past few years, the government has implemented various strategies and initiatives to increase job prospects for young people to deal with the specific issues of youth unemployment. Based on the extensive experience gained, it has become clear that there are no straightforward and comprehensive answers to this issue. According to respondents, unemployment relates to several issues such as the government system and unfriendly policies enabling the growth of the private sector. Respondents said that frequently changing policies, on the one hand, try to support the growth of private sectors, while, on the other hand, there are many restrictions. Another frequent comment is on the education system which has not been able to nurture and educate the youths with the qualifications and skills that are required in the changing market. Bhutan is going through a phase where the ideology of the country’s developmental approach is changing. Under the new reformation, the country’s civil service system has been restructured into four clusters of governance, economic, social, and security with the objective of introducing a more efficient and relevant institutional system. It is hard to change an established institution as it requires significant effort and financial resources to be adjusted by those who wish to bring about change (Cerna 2013). Hence, it is clear that Bhutan would need substantial investments despite facing existing economic constraints. Also, policy reforms can have unforeseen consequences due to the ‘collective action problem’, and therefore, all individuals must agree and work together to achieve it. Many of the Bhutanese are finding it hard to accept the changes that are happening, especially those who have been directly affected by the policy reforms, which has therefore resulted in increasing out-migration. The tourism industry, on the other hand, has been one of the largest sectors that contributed to the country’s revenue and building of international reserves. Tourism in Bhutan has also created a wide range of opportunities for everyone, with direct and indirect employment both in the formal and informal sectors. One of the changes brought by the reform has been the increase in the sustainable development fee (SDF) from US$65 to US$200 per night per tourist visiting the country. This has unsettled the majority of stakeholders in the tourism industry, and it has also severely affected the potential employment in the sector. Many respondents are of the view that the move has discouraged tourists from visiting the country, resulting in decreased employment opportunities. The service sector, which contributed to 46.61 percent of GDP in 2021, accounts for the highest share to the GDP. However, respondents are of the opinion that the share of service to GDP will likely reduce with the closure of small hoteliers due to the limited number of tourists visiting the country. Respondents also felt that the SDF policy, combined with the COVID-19 pandemic, has severely affected the employment of youths and females who earn their livelihood from the service sectors, especially cottage and small businesses which depend on tourism. 15 Figure 3: Tourism visitor record (pre-COVID and post-COVID) 350,000 315,599 300,000 274,097 254,704 250,000 209,570 200,000 155,121 133,480 150,000 116,209 100,000 105,407 77,063 64,028 40,873 50,000 29,812 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Sept. 2022- Aug. 2023 International Regional Total Visitors Source: Bhutan Tourism Monitor Reports, Department of Tourism, Ministry of Industry, Commerce and Employment (MoICE), RGoB. Uncertainty in policy decisions is also a major concern shared by the respondents. For example, respondents shared that during the COVID-19 pandemic, vegetable vendors and farmers earned adequate income due to import restrictions. However, with the lifting of restrictions on vegetable imports, the livelihood of people depending on such activities has been severely affected as the price of imported vegetables is comparatively lower than the domestic products. Respondents feel that such uncertainty in policy decisions discourages them from engaging in gainful employment. While some of the policies may contradict the objectives of creating available economic conditions to address unemployment, the specific government institutions engaged in skilling youths and supporting youth engagement and employment are trying their best despite their own challenges of limited resources. The skilling programs initiated by the government should be designed as per the changing market demands and engagement of stakeholders from private entities. Given the prospects of jobs in the field of information technology (IT), the government has been offering skills training in areas of information technology (IT). Since the maximum duration supported is only for 6 months, the respondents feel that they are not designed to create viable job opportunities for general youths, unless the youths have education background in IT. Unlike youths in developed countries, youths in Bhutan are not proficient with basic knowledge and skills in IT. For youths Some of the lucrative jobs in the IT sector needs youth to get longer for more than the half year duration supported by the government. The respondents also feel that several of the upskilling and re-skilling programs initiated by the government could also be made more impactful with frequent monitoring and evaluation of the program outcome. Although the long-term impact is yet to be seen, according to the data provided by the 16 Department of Employment and Entrepreneurship, there have been many initiatives and interventions made by the government to support youth employment both within and outside the country: • The Youth Engagement and Livelihood Program (YELP) helps with a yearlong monthly allowance for youth to transition into the workforce environment. • The Overseas Employment Program helps youth get employed overseas and gain transfer of knowledge, skills, and exposure from other countries. • The Build Bhutan Project (BBP) was initiated to fill the gap in the construction sector during the COVID-19 pandemic period and engage the unemployed or laid-off workforce in the construction sector. • The GOWA forums connect trained talents directly with the labor market for on-the-spot recruitment. • The Entrepreneurial Development Program trains and helps youth initiate viable start-ups. Based on the data, the majority of the beneficiaries for the YELP and Overseas Employment Program are female. This is mainly because most of the jobs available within these programs are in the hospitality sector. However, the data are different in the BBP where the majority of the beneficiaries are male. The number of youths enrolled through different programs by the Department of Department of Employment and Entrepreneurship under the Ministry of Industry, Commerce, and Employment is shown in Tables 5, 6, and 7. Table 5: Number of youths engaged through the YELP 2019/20 2020/21 2021/22 2022/23 M F T M F T M F T M F T 179 198 377 394 620 1,014 410 683 1093 899 1,657 2,556 Table 6: Number of youths engaged through the Overseas Employment Program 2018/19 2019/20 2020/21 2021/22 2022/23 M F T M F T M F T M F T M F T 462 685 1,147 980 1,400 2,380 59 134 193 498 955 1,453 670 1,393 2,063 Table 7: Number of youths engaged through the BBP 2020/21 2021/22 M F T M F T 1,071 319 1,390 277 85 362 Source: Department pf Employment and Entrepreneurship (DoEE), Ministry of Industry, Commerce and Employment (MoICE), RGOB 17 7.5 Technological changes Technological advancements, while offering numerous opportunities, also present specific challenges that affect female employment in the country. Unintentionally, the tech industry has been gender biased due to the societal mindset of males being more capable of handling technology. Technological advancements have also led to changes in work patterns, such as remote work and flexible schedules. Although the new culture of remote working or online freelancing provides great opportunities to work for clients within or outside the country, the majority of youths and females are not prepared enough to take up the tasks. They have yet to get trained and become familiar with the culture of online work and have the capacity to keep up with the changing technologies. For females, while these changes can benefit them by providing more flexibility, it they face a lot of challenges in maintaining work-life balance. Traditionally, the gender roles and expectations of females as the caregiver often place a heavier burden on women in a household, making it difficult for them to adapt as well as get fully engaged in the workforce, especially in technology-related fields that often require long work hours or irregular schedules. Moreover, with the technological change, many of the public and commercial services are now being digitized and they require lesser manpower. Government, corporate, and private institutions have started incorporating digital tools and systems to improve the effectiveness of managing and overseeing their services, production, and operations. Therefore, institutions are now focused on shrinking the size of the workforce to a more compact and efficient team of human resources. As technology continues to advance at an unprecedented rate, traditional jobs are being automated or outsourced to countries with lower labor costs. The reality now faced by many is that digital and online services are taking over many of the frontline customer service-based jobs that are mostly handled by female employees. One respondent shared about the most recent revolutionary artificial intelligence (AI) tools such as ChatGPT; while there are a lot of advantages in using the tool, it is expected that many of the assistant or support-level jobs will be taken over by AI. The feminization of agriculture is also taking place in rural areas due to the lesser number of males and the migration of the working-age male population to urban areas. The females have no choice but to learn how to use agricultural machinery and equipment, which they feel are mostly designed to be used by men. The youth in the agriculture sector face many challenges to market their products despite their hard work. Although they are familiar with social media platforms, they lack the capacity to use digital platforms to market or sell their products. The need to build digital marketing capacities among youth and females in the agriculture sector is one of the priorities highlighted in the Bhutan Workforce Futures 2022 strategy reports developed by the erstwhile Ministry of Labor and Human Resources and the United Nations Development Programme (UNDP). 7.6 Social challenges The significant changes due to the rapid globalization and advancement of technology are placing a lot of pressure on the current generation of youth, especially those who have been deprived of opportunities to learn and keep updated with the latest skills and knowledge. They face various challenges that were not experienced by the older generations. The rapid pace of change requires them to continually update and upgrade their skills to keep up with emerging technologies and market demands. As expressed by the Department of Employment and Entrepreneurship, one of the biggest challenges is the mismatch 18 between the skills of the existing youths and the skills demand of the current market. This places immense pressure on youths to acquire relevant skills and knowledge to remain competitive in the job market. As expressed by respondents, most young people in Bhutan are not used to openly expressing their opinions or thoughts. The deep-rooted social and cultural norms have not really allowed them the freedom to be more communicative and confident. Many of the youths suffer from low self-esteem and poor self-image because of their low economic status and lack of mentoring to help their personal growth. They are also frustrated by their inability to get employed or engage in a meaningful livelihood activity and they find themselves incapable of succeeding in life. A serious concern is the emotional sensitivity of many youths of today and their lack of resilience to face the tough challenges of life. One of the significant issues is the mental health condition, especially among youths going through depression. Those who do not get help resort to suicide or risky behaviors such as substance abuse and unprotected sexual contact. Youths engage in risky behaviors with manipulated use of pharmaceutical medicines and inhalants which are commonly abused drugs (UNICEF Bhutan 2013). Young females are more vulnerable if there are no focused interventions or gender-responsive economic interventions. One emerging issue is the increasing number of sex workers in urban towns such as Gelephu, Phuntsholing, Samdrupjongkhar, and Thimphu. Young girls, single mothers, or divorcees without income or access to or control over economic resources or gainful employment are the ones who resort to sex work. Since it is illegal, they cannot access health services and get support from police personnel, especially if they suffer from gender-based violence. Some of the common social challenges expressed by youth respondents are related to the social and religious stigmas imposed by cultural rules and societal norms practiced by their community. They are discouraged or frowned upon when implementing some viable business ideas, which puts immense pressure on them to either give up their entrepreneurial endeavors or become outcast from the community. A few examples are as follows: the youths in the Haa District had to give up their dream of starting a trout farm and an individual in Dagana was pressured to close his piggery farm. 7.7 Impact on youth migration When asked about some of the most pressing challenges resulting from youth unemployment, the most prominent response was the outward migration of the active workforce, including youths, to another country, especially to Australia. Around 70 percent of registered jobseekers actively seek overseas employment (DWPSD, 2023). Continuous emigration of the working-age population from Bhutan may be a critical impediment to long-term economic growth. Bhutan can suffer economic hardships due to loss of tax revenues, lack of potential future entrepreneurs, loss of skilled workers, and lower returns from investment in education and health. If this is unchecked, it will result in the country losing its most educated and talented workforce as both highly qualified and low-skilled individuals are migrating. Those who are migrating include individuals from public and private sectors as well as jobseekers, leaving a huge mismatch between the demand and supply in the economy. The emigration of the youth from the country is a major concern among the respondents. Most of the respondents are of the opinion that this trend has created a high vacuum in the economy. This can pose significant impediments to the country’s economic growth, in both the short and the long term. Respondents are of the opinion that the outflow of the working-age population will exert huge pressure on the prospects of the country as the lower population can result in an inadequate labor force, lower 19 saving and investment, small market size, and underutilization of infrastructure. Respondents also felt that youths going abroad may cause both a human resource and a financial crisis. In particular, one respondent cited the example of recent declining housing rents and empty flats in the outskirts of Thimphu City. According to the respondents, this should be a concern for policy makers as most of the houses in the capital are financed through bank loans. According to the Monthly Statistical Bulletin published by the Royal Monetary Authority of Bhutan, housing loans account for 27.6 percent of the total loan portfolio, amounting to Nu 54.50 billion as of March 2023. If it remains unchecked, outward migration will have huge implications for the nonperforming loans (NPLs), affecting the stability of the financial sector in the medium term. 8. Conclusion The research was carried out with the objective of better understanding the current situation, challenges, and constraints faced by women and youth in accessing employment opportunities in the country. It focused on three main economic sectors: services, industries, and agriculture, with additional emphasis on women’s access to employment opportunities and youth migration. The issues raised by the respondents are poor personal traits, inadequate or mismatched education system, lack of career guidance, and gender stereotyping, among others, that have significant implications for youth and female employability in the country. The research findings highlighted several key issues, including challenges in the educational setting, lack of adequate facilities for female employees, the impact of climate change on female unemployment, the outmigration of the active workforce, government policies, technological changes, and social challenges. These findings shed light on the complex and interconnected factors that contribute to youth and female unemployment in Bhutan and provide valuable insights for policy makers and stakeholders in developing strategies to enhance employment opportunities, inclusive growth, and sustainable development in the country. Additionally, the research underscores the need for targeted interventions, such as improving education systems, addressing gender disparities, providing supportive facilities, addressing climate change impacts, and implementing effective government policies and programs. 9. Policy Recommendation Based on the research findings, the following policy recommendations are proposed: • Education. The integration of TVET into the mainstream education system should be continued. Additionally, special accommodations should be made within the education system for individuals with disabilities who require specific vocational training. • Workplace support for female employees. To support female employees, workplaces could consider ways to provide assistance for elderly family members and childcare services. By addressing the needs of elderly family members, women can have more flexibility with their time and commitments. Workplaces could also offer basic facilities to address the needs of female employees such as separate restrooms. 20 • Flexible work arrangements. Offer flexible work hours and remote work options to accommodate work-life balance, especially for those with caregiving responsibilities. • Addressing social challenges. To address social challenges, it is crucial to boost self-esteem and implement behavioral programs. Confidence-building initiatives should be promoted through counselling or training support. • Parental leave. Allow extended parental leave or the ‘work from home’ option for fathers to ensure they can provide support during the absence of the mother after the completion of maternal leave. This will contribute to a more balanced caregiving role between parents. • Legal representation. Establish access to legal representation among relevant government institutions, particularly within the labor sector. It is a crucial step in addressing specific issues concerning women and youth who can access legal assistance, advocacy, and support in navigating the complexities of labor-related matters. The following are possible behavior-related actions that can be taken to help address the youth unemployment challenges. • Role Models: Expose youth, particularly the disadvantaged, to success stories of similar people or individuals that have similar characteristics they identify with (e.g. a young woman who started a business). This can be done through different media, including in-person discussions in education settings, but video is highly effective at making viewers increase job search effort (Ahmed, et al., forthcoming; Olsson and Martiny, 2018). • Beliefs about Ability: If jobseekers have inaccurate beliefs about their skills, they apply to jobs that do not match their skills, which keeps unemployment high. By running a program to measure jobseekers’ numeracy and communications skills and sharing the results with them, we will allow jobseekers to apply for jobs that fit better. In South Africa, this shows jobseekers what skills they were better and worse at compared to their own expectations. It led to higher earnings and job quality (Kiss, Garlick, Orkin and Hensel (2023)). • Mentoring: By offering mentoring programs, we can correct labor market misconceptions among young job seekers. These programs will provide information about entry-level jobs to unemployed youth and how job search functions. It may lead to lower expectations of entry- level salaries, which can lead the unemployed to reject potential offers. In an experiment in Uganda, such a program led to a 27% increase in employment. This is a highly cost effective and scalable policy with an estimated internal rate of return of 300% (Alfonsi, Namubiru and Spaziani (2023)). • Employment Readiness: Before the implementation of active labor market programs, the use of an Employment Readiness Indicator Questionnaire (ERIQ) can help measure employment readiness for those labeled “hard-to-place”. These predictions can be used to enact actionable recommendations by identifying malleable traits, such as social skills, coping strategies, goal orientation, and self-efficacy, that significantly impact employment readiness (Bodilsen, Nielsen and Rosholm (2023)). 21 • Personal Initiative Training: Teaching “personal initiative,” a psychology-based mindset training program, can lead to persistent improvements in the realm of entrepreneurship. It allows people to create and push for positive things in their life by themselves. This works best for those with higher pre-existing human capital but has positive effects for everyone (Campos et al. (2017)). • Skills Certification: Create training workshops that certify skills of youth, which allows them to provide objective information about their ability to employers. Past such workshops have resulted in large positive effects on the probability of finding formal jobs and higher earnings. The gains tend to be concentrated among groups who generally have worse labor market outcomes, making it ideal for the unemployed. (Abebe et al. (2020)) 22 References Abebe, G., Caria, A.S. and Ortiz-Ospina, E., 2021. The selection of talent: Experimental and structural evidence from Ethiopia. American Economic Review, 111(6), pp.1757-1806. Ahmed, H., Mahmud, M., Said, F. and Tirmazee, Z., 2024. Encouraging female graduates to enter the labor force: Evidence from a role model intervention in Pakistan. Economic Development and Cultural Change, 72(2). Alfonsi, L., Namubiru, M. and Spaziani, S., 2023. Gender gaps: Back and here to stay? Evidence from skilled Ugandan workers during Covid-19. Review of Economics of the Household, pp.1-48. Bodilsen, S.T., Albeck Nielsen, S. and Rosholm, M., 2023. Measuring Employment Readiness for Hard-to- Place Individuals. IZA Discussion Paper No. 16626 Campos, F., Frese, M., Goldstein, M., Iacovone, L., Johnson, H.C., McKenzie, D. and Mensmann, M., 2017. Teaching personal initiative beats traditional training in boosting small business in West Africa. Science, 357(6357), pp.1287-1290. Cerna, L. 2013. The Nature of Policy Change and Implementation: A Review of Different Theoretical Approaches . OECD. DWPSD (Department of Workforece Planning and Skills Development), MoESD (Ministry of Education and Skills Development). 2023. Labour Market Report. Thimphu: DWPSD, MoESD. Kiss, A., Garlick, R., Orkin, K. and Hensel, L., 2023. Jobseekers’ Beliefs about Comparative Advantage and (Mis) Directed Search. IZA Discussion Paper No. 16522 Klugman, J., H. Hanmer, S. Twigg, T. Hasan, J. McCleary-Sills, and J. Santamaria. 2014. Voice and Agency: Empowering Women and Girls for Shared Prosperity. World Bank Publications. MoE (Ministry of Education) and UNICEF (United Nations Children's Fund). 2020. Evaluation of the Inclusive and Special Education Programme in Bhutan. Thimphu: UNICEF and MoE, Royal Government of Bhutan. MoLHR (Ministry of Labour and Human Resources) and UNDP (United Nations Development Programme). 2022. Bhutan Workforce Futures. Thimphu: MoLHR and UNDP.NCWC, (National Commission for Women and Children). 2020. Gender and Climate Change in Bhutan. Thimphu: NCWC. Neff, D., K. Sen, and V. Kling. 2012. “The Puzzling Decline in Rural Women’s Labor Force Participation in India: A Reexamination.” GIGA Working Papers. NSB (National Statistics Bureau). 2022a. Bhutan Living Standards Survey. Thimphu: NSB, Royal Government of Bhutan. NSB. 2022b. Bhutan: Multidimensional Poverty Index. Thimphu: NSB, Royal Government of Bhutan. 23 Olsson, M. and Martiny, S.E., 2018. Does exposure to counter stereotypical role models influence girls’ and women’s gender stereotypes and career choices? A review of social psychological research. Frontiers in Psychology, 9, p.2264. Ren, M., 2022. The “Masculine” Culture of STEM Fields. [Online]. Available at: https://www.globalstemyouthjournal.org/post/the-masculine-culture-of-stem-fields Sudan, F. K. 2021. “Technological Disruptions, Youth Unemployment and Vocational Education Challenges in South Asia: A Short Report.” Global Economics Science 80–97. Taşseven, Ö., D. Altaş, and U. Turgut. 2016. “The Determinants of Female Labor Force Participation for OECD Countries.” Uluslararası Ekonomik Araştırmalar Dergisi 27–38. UNFPA (United Nations Population Fund). 2022. Population Ageing in Bhutan: Current Situation and Future Prospects. UNFPA. UNICEF Bhutan. 2013. A Situation Analysis of Children, Youth and Women in Bhutan. Thimphu: UNICEF, Bhutan. UNICEF Bhutan. 2022. Empowering Adolescents to Become Changemakers. UNICEF. https://www.unicef.org/bhutan/stories/empowering-adolescents-become-changemakers. 24