Laos job market continues to evolve amid high cost of living
The prices of various types of consumer goods, whether in stores or fresh markets, remain high despite a moderate decrease in the inflation rate last month. - VT
VIENTIANE: Inflation in Laos is undermining living standards and reshaping the labour market, according to the latest World Bank Household Monitoring Survey.
As prices rise, more individuals are entering the workforce, but with wages failing to keep pace with inflation, many are turning to self-employment or seeking work abroad to support their families.
The tenth round of the World Bank's Rapid Monitoring Phone Surveys, conducted across Laos from January to February 2025, reveals that employment has steadily increased over the past four years.
In January 2025, 97.1 per cent of respondents reported being employed, compared to 94.4 per cent in June 2024 and 88.2 per cent in May 2022.
A growing number of women have joined the workforce, significantly narrowing the gender employment gap from 8 per cent in December 2022 to just 1.9 per cent in January 2025.
However, high inflation, currency depreciation and falling real wages have prompted many workers to shift from service-sector roles to agriculture, from wage employment to self-employment, or to emigrate.
'The transformation of the labour market in Laos is astonishingly quick,' the country manager of World Bank for the Lao PDR, Alex Kremer, said.
'Three years of high inflation and currency depreciation have reshaped work choices, eroded household living standards, accelerated migration and undermined human capital development,' he said.
'The findings of this survey suggest that families have depleted their assets and may eventually run out of coping mechanisms.'
Inflation has moderated due to tight monetary policy and foreign exchange controls, dropping from 26.2 per cent in mid-2024 to 11.2 per cent in March 2025.
Nevertheless, it remains high, and many households are financially weakened following years of persistent price increases.
Wage growth has remained steady, recorded at 13 per cent in December 2024. The decline in real wages has eased, slowing from 11.2 per cent in 2023 to 3.9 per cent in 2024.
However, profit growth among non-farm family businesses has lagged behind wage increases, with average profits rising by only 7.4 per cent in the year to December 2024.
This is below both the annual wage growth rate and the year-on-year inflation rate of 16.9 per cent. In rural areas, households continue to expand agricultural activities and are selling more produce, as farming returns remain more favourable than those from non-agricultural ventures.
Labour migration remains prevalent, with workers seeking better prospects and higher wages abroad. One-third of the total number of migrants reported in January 2025 had left Laos during 2024.
The income earned by Lao workers overseas plays a vital role in supporting households back home: 8.6 per cent of surveyed households received remittances in 2024, averaging 22.9 million kip annually, equivalent to approximately 76 per cent of the annual minimum wage.
To cope with high food prices, many households have drawn on savings, sold livestock or other assets, or resorted to borrowing. These measures are depleting household assets, undermining future resilience and income-generating capacity.
One-third of households reported cutting back on health and education spending.
As a consequence, children from poorer families are more likely to be out of school.
In January 2025, 11.4 per cent of school-age children from low-income households were not enrolled, more than double the 4.5 per cent rate among children from more affluent families. - Vientiane Times/ANN
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