Determinants of Unemployment: Characteristics and Policy Responses in Bhutan

Abstract

This study tries to explore the determinants of unemployment by using secondary cross sectional data from the labor force survey of Bhutan, 2015. A comparative analysis is provided to give some differences in the determinants of youth and adult unemployment. The estimation is done for all, youth and adult samples. The comparative analysis from the three samples indicates that all the determinants have a stronger effect on the “all” samples and the strongest effect on the youth sample giving realistic results and a strong correlation in context to the labor market in Bhutan. From the result it is not surprising to find that over education as a drawback for the labor market. Although a lot of policy responses are mediated by the government to reduce the high prevalence of unemployment amongst the youth, yet our research suggests special and specific interventions are requires.