Yangyel Lhaden

More than one third or around 35 percent of the country’s working-age population is economically inactive, according to the latest Labour Force Survey Quarterly Report (LFSR).

The report reveals that out of 600,412 individuals aged 15 and older, 209,299 are economically inactive, meaning they neither worked nor sought employment during the reporting period.

The number of economically inactive women are nearly double that of men. More Bhutanese are economically inactive in rural areas, with inactivity rate increasing with age.

Of the total economically inactive population, 76,521 are men and 132,779 are women. In urban areas, there are 90,717 economically inactive individuals, while rural areas account for 118,582.

Gender and region wise, 31,395 men and 59,322 women are economically inactive in urban areas while 45,126 men and 73,457 women fall into this category in rural areas. 

According to the LFSQR, the labour force participation rate (LFPR) and inactivity rates vary by age group. The LFPR is the percentage of people who are either working or actively looking for a job out of the total working-age population.

The youngest cohort (ages 15-19) has the lowest participation at just 7.4 percent, likely due to educational commitments.

Overall, 65.1 percent of people are part of the workforce, while 34.9 percent are not, showing a typical pattern where people are most active in the workforce during midlife and start working less as they approach retirement.

The labour force participation shows a clear pattern of peaking in midlife, with 86 percent of those aged 40-44 actively engaged in the workforce, and a low inactivity rate among people in their prime working years (30-54).

However, after age 55, participation steadily decreases, with only 35.7 percent of those aged 65 and older still working, while inactivity rises to 64.3 percent.

This trend aligns with country’s  ageing population and declining fertility rate, signaling potential challenges ahead.

Bhutan will transition into an ageing society by 2027, with the elderly population projected to reach 7.4 percent of the total population, according to the Population Projections for Bhutan (2017-2047).

By around 2050, this proportion is expected to rise to approximately 14 percent, marking Bhutan’s shift into an aged society.

According to the UNFPA’s ‘Population Ageing in Bhutan: Current Situation and Future Prospects 2022’  report, the proportion of people aged 65 and over is expected to more than double by 2047, with the number of elderly rising from 50,715 in 2022 to 118,650.

At the same time, Bhutan’s fertility rate has dropped sharply, from six children per woman in 1982 to just two in 2023—below the global population replacement level of 2.1 births per woman.

The report states that the repercussions of an ageing population are vast and varied. In terms of economic consequences, an ageing population often means slower economic growth and a smaller workforce. This can lead to a decrease in tax revenue for the government and can also put a strain on social welfare programmes.