While unemployment remains low, skills mismatch and lack of qualifications continue to affect jobseekers
The overall employment rate in the country remained high at 97 percent in the third quarter of 2026, while youth unemployment increased to 17.5 percent. The employment rate was slightly lower than 97.3 percent in Q2 but marginally higher than the same quarter in 2025.
The findings are from the Q3 2026 Labour Force Survey, conducted by the National Statistics Bureau (NSB), covering 3,016 households across all 20 dzongkhags, of which 2,911 households participated, resulting in a response rate of 96.5 percent.
Male employment was 97.7 percent, compared with 96 percent for females. Rural employment remained higher than urban employment, at 97.9 percent and 95.4 percent, respectively. The NSB attributed the higher rural employment rate partly to the large share of rural residents engaged in own-account agricultural activities, particularly farming on their own land.
Of the 384,892 employed persons, 42.8 percent worked in the services sector, 41.6 percent in agriculture and 15.6 percent in industry.
Employment patterns also differed by gender. A higher proportion of employed men worked in services, while women had a higher concentration in agriculture.
In terms of employment status, 39.7 percent of employed people were paid employees, including regular and casual workers. Own-account workers accounted for 33.9 percent, while contributing family workers represented 26.5 percent of total employment.
The survey found that 77.9 percent, or 615,543 people, of the total population were aged 15 years and above, constituting the working-age population. Of this group, 396,684 people were economically active, with males accounting for about 60 percent and females 40 percent. Rural residents made up 64.4 percent of the economically active population, compared with 35.6 percent in urban areas.
The Labour Force Participation Rate (LFPR) stood at 64.4 percent in Q3 2026, down slightly from 65.1 percent in the previous quarter and 65.5 percent in the same quarter last year. However, the NSB said the changes were not statistically significant, indicating that labour force participation has remained broadly stable.
Male participation continued to be significantly higher than female participation, with an LFPR of 73.5 percent for men compared with 54.5 percent for women.
Rural labour force participation also remained higher than urban participation, at 67 percent and 60.3 percent, respectively. The report noted that participation in rural areas has remained higher across quarters, although it recorded a slight decline in Q3 2026.
The gender gap is also reflected in labour force inactivity. The inactivity rate for women stood at 45.5 percent, compared with 26.5 percent for men. Education and family responsibilities continued to be the main reasons for people remaining outside the labour force.
While men primarily cited studies or training, women predominantly identified household and family responsibilities as their reason for not participating in the labour market. About 16.6 percent of those outside the labour force reported retirement or being pensioners as their main reason.
The survey also highlights a persistent difference in labour income between men and women. Average monthly labour income stood at Nu 27,192 for employed persons. Male workers earned an average of Nu 30,027, which was Nu 6,985 higher than the average income of female workers.
The income gap was observed in both urban and rural areas, with men reporting higher average earnings than women. The median monthly labour income stood at Nu 25,000, meaning half of employed persons earned below that level.
Despite the low overall unemployment rate, youth unemployment continues to be a major labour market concern. The national unemployment rate stood at 3 percent in Q3, up slightly from 2.7 percent in Q2. However, the increase was not statistically significant because the confidence intervals overlapped. Compared with Q3 2025, the overall unemployment rate was 0.2 percentage points lower.
Female unemployment remained higher than male unemployment, at 4 percent compared with 2.3 percent. Among unemployed people actively seeking and available for work, 42.8 percent were young people aged between 15 and 24.
The youth unemployment rate increased to 17.5 percent, up 4.1 percentage points from the previous quarter. Although the rate declined slightly by 0.3 percentage points compared with Q3 2025, it remained nearly six times the overall unemployment rate.
The survey found that unemployment was highest among younger age groups and declined as age increased. The number of unemployed people was highest among those aged 20 to 24.
The largest share, 29.5 percent, said they were unemployed because they had recently completed their studies. This was followed by qualification mismatch at 22.7 percent and inadequate qualifications at 20.7 percent. Lack of work experience accounted for another 10.8 percent, while 3.8 percent reported having voluntarily resigned from their previous jobs.
Among actively unemployed people, 67 percent had been without work for less than six months. The remaining 33 percent had been unemployed for six months or longer, while 15.7 percent of all unemployed people had been without work for more than one year despite actively seeking employment and being available for work.
Tashi Namgyal, Thimphu
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