Despite steady progress in education, Bangladesh is facing a growing challenge as job creation fails to keep pace with the rising number of graduates. As a result, a significant portion of educated youth are remaining unemployed, with many returning to rural areas and engaging in agriculture for their livelihoods.

A recent report by the International Monetary Fund (IMF) highlights this emerging trend, pointing to a structural imbalance in the country’s labour market. While the economy appears to be gradually moving toward industrialisation, employment generation in key sectors has not kept up.

According to the report, unemployment among highly educated individuals is considerably higher than among those with lower levels of education. The jobless rate for people with below-secondary education stands at just 3.01 percent, whereas it rises to around 8.7 percent among the highly educated. More strikingly, about 25 percent of educated youth remained unemployed in 2024—more than three times higher than their less-educated counterparts.

The disparity is also evident between urban and rural areas. Youth unemployment in cities is estimated at 13.27 percent, compared to 6.63 percent in rural regions. Analysts say the concentration of limited formal job opportunities in urban centres, combined with intense competition, has contributed to this gap.

Women face even greater challenges in the labour market. The unemployment rate among highly educated women stands at 16.66 percent, nearly double that of men at a similar education level, reflecting persistent gender disparities in employment opportunities.

The IMF report further notes that although the manufacturing sector’s share in the economy has increased over the past decade, this growth has largely been “jobless.” Employment in both manufacturing and services has declined by 2.2 and 2.6 percentage points respectively, indicating that these sectors are not generating sufficient jobs.

Meanwhile, agriculture—despite a declining share in GDP—has absorbed a growing number of workers. The sector is effectively acting as a buffer, taking in surplus labour and easing unemployment pressures. However, this trend raises concerns about declining productivity, as more workers depend on a sector with relatively low output efficiency.

Economists attribute the situation to several structural issues. One key factor is the disconnect between the education system and labour market demands, leaving many graduates without the practical skills required by industries.

In addition, sluggish private investment has limited the expansion of job opportunities. Many graduates also tend to prefer formal or white-collar jobs, which remain scarce, while less-educated individuals are more flexible in entering informal sectors.

Experts suggest that addressing this growing challenge will require coordinated efforts, including reforming the education system, expanding skill-based training, boosting private and foreign investment, and creating more employment-oriented industrial growth.

Without timely policy interventions, the rising unemployment among educated youth could pose a significant risk to Bangladesh’s long-term economic stability, they warn.