Sri Lanka has a significant youth unemployment problem. Past authors h
ave viewed unemployment as particularly high among the more educated,
but once we control for sex, sector and age the positive relation betw
een education and unemployment disappears for urban youth and is signi
ficantly weakened for rural youth. Moreover even the relation among ru
ral youth is brought into doubt when we account for unemployment durat
ion. Typical unemployment spells last four years or more, and duration
is not related to education. Controlling for age, more educated youth
have higher unemployment rates because they have left school more rec
ently.