The share of public sector employment declined from 26 per cent of the total employed labour in 1991 to 14.9 per cent in 2008 while the size of the private sector employees has only increased from 40.0 per cent to 41.1 per cent in the corresponding period. The size of the employers, category throughout the study period has fluctuated around 2.5 per cent of the workforce. As a whole, compared to the salaried employment, non- salaried employment in Sri Lanka has grown faster indicating that more and more people are engaged in low income and low productivity activities. As Betcherman (2002) highlights, this condition can be considered as a worsening of the labour market situation in Sri Lanka. This shows that the private sector under reforms, despite making it as the engine for growth, has not shown a substantial progress in demanding labour as expected.
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