ASIATODAY.ID, JAKARTA – The job market in the Lao People’s Democratic Republic (Lao PDR) is undergoing a significant transformation as rising living costs and persistent inflation continue to strain household incomes, according to the latest findings from the World Bank’s Household Monitoring Survey.
To keep up with the growing financial pressure, more Lao citizens are entering the workforce. However, as wages lag behind inflation, many workers are now turning to self-employment and labor migration as alternative means to support their families.
Data from the tenth round of the World Bank’s Rapid Monitoring Phone Surveys, conducted between January and February 2025, reveal a steady rise in employment over the past four years. As of January 2025, 97.1% of respondents reported being employed, up from 94.4% in June 2024 and 88.2% in May 2022.
One of the more encouraging developments is the narrowing gender gap in employment. Female participation in the workforce has grown significantly, with the employment gap between men and women shrinking from 8% in December 2022 to just 1.9% in January 2025.
Despite these gains, economic pressures have pushed many workers to shift from service jobs to agriculture, or from salaried positions to informal or self-employment. Some have even chosen to leave Laos in search of better opportunities abroad.
“The transformation of the labor market in Laos is astonishingly quick,” said Alex Kremer, World Bank Country Manager for the Lao PDR quoted Saturday, May 17,2025.
“Three years of high inflation and currency depreciation have reshaped work choices, eroded household living standards, accelerated migration, and undermined human capital development. The findings suggest that families have depleted their assets and may eventually run out of coping mechanisms.”
Although inflation in Laos has slowed—dropping from 26.2% in mid-2024 to 11.2% in March 2025—due to tighter monetary policies and foreign exchange controls, the economic strain remains. Years of price surges have left many households financially weakened.
Wage growth stood at 13% in December 2024, but real wages (adjusted for inflation) declined by 3.9% that same year, an improvement from the 11.2% drop in 2023. Meanwhile, non-farm family businesses saw profit growth of only 7.4%, well below the inflation rate of 16.9% and trailing wage growth.
In rural Laos, many households have expanded their agricultural activities, relying more heavily on farming as it continues to yield higher returns than non-farm enterprises.
As economic opportunities shrink domestically, Lao labor migration is accelerating. One-third of migrants recorded in January 2025 had left the country in the previous year. Remittances from overseas workers have become a crucial source of household income in Laos, with 8.6% of households receiving financial support from abroad in 2024. The average amount received was 22.9 million kip per household—equivalent to about 76% of the annual minimum wage.
To cope with high food prices, many families are selling livestock, borrowing money, or drawing on their savings—strategies that risk depleting long-term resources. Alarmingly, a third of surveyed households have cut spending on health and education.
This financial strain is having a visible impact on school enrollment among low-income families. In January 2025, 11.4% of school-age children from poor households were not in school, more than twice the 4.5% non-enrollment rate among wealthier families. (AT Network)
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