|Married|0.007|0.000|‐0.005|0.009<sup>***</sup>|
|---|---|---|---|---|
|Divorced or separated|‐0.000|‐0.000|‐0.000|‐0.001<sup>*</sup>|
|Years of education|0.488<sup>***</sup>|0.488<sup>***</sup>|0.152<sup>**</sup><br>|0.281<sup>***</sup>|
|Ethnicity: Sri Lankan Tamil|‐0.128|‐0.001|‐0.005<sup>*</sup>|0.000|
|Ethnicity: Indian Tamil|‐0.000|‐0.004<sup>*</sup>|‐0.001|0.005<sup>***</sup>|
|Ethnicity: Sri Lankan Moor|‐0.000|0.002|‐0.002|‐0.008<sup>***</sup>|
|Constant|‐0.251<sup>*</sup>|‐0.285<sup>***</sup>|0.044|‐0.031|
|Interactions|||||
|Urban|0.000|‐0.002|0.001|0.000|
|Household size|‐0.009|‐0.013<sup>*</sup>|‐0.003|0.000|
|Married|0.049|0.001|‐0.026|0.036<sup>***</sup>|
|Divorced or separated|‐0.002|‐0.002|‐0.002|‐0.002<sup>*</sup>|
|Years of education|‐0.085<sup>***</sup>|‐0.129<sup>***</sup>|‐0.012<sup>**</sup>|‐0.054<sup>***</sup>|
|Ethnicity: Sri Lankan Tamil|‐0.001|‐0.000|‐0.000|‐0.000|
|Ethnicity: Indian Tamil|‐0.000|0.002|0.000|‐0.000|
|Ethnicity: Sri Lankan Moor|0.000|‐0.000|0.001|0.002<sup>***</sup>|
|N|5,551|5,175|14212|36452|

> * _p_ < 0.10, ** _p_ < 0.05, *** _p_ < 0.01. Dataset: Labor Force Survey 2015.

We see that the differentials in the employment rate can be explained partly due to the observed differences in the levels of the explanatory variables, their returns, and an interaction of these two. We find that observable differences in the levels of characteristics explain a larger share of the difference between the employment rate youth and adults than was the case for the gender differential. We see that the returns to education is the largest contributor to the youth‐adult gap in employment rate in the Northern and Eastern provinces. In addition to this, we see that the lower education levels of youth in the Northern and Eastern provinces partly explains its lower employment compared to that of adults in these provinces.

# 4.3 What _does not_ explain low employment rates in the Northern and Eastern provinces?

The above section identified factors that may contribute to low levels of female employment in the North and East. A variety of seemingly plausible explanations for low employment rates in the region, particularly for women, are less consistent with the evidence. The first of these is greater rates of disability. Figure 16a presents rates of disability across different provinces. The proxy for disability used here is the response to the question on the reason why an individual is not in the labor force. Although this is not an ideal measure for the prevalence of disability, this is the best that the data in the labor force survey allow. Although we see some areas of the country with higher rates of disability than others (such as Jaffna or the central parts of the country), it is not obvious that disability rates are much higher in the Northern and Eastern provinces than in the rest of the country. Disability rates are notably higher for men than for women, making it unlikely that disability is responsible for the significant gender gap in employment. The story is similar for the prevalence of mental illness (Figure 16b). Although there is variation in the prevalence of mental illness within Sri Lanka, it is not obvious that it is higher in the 25