Why Better Access to Schools Has Not Transformed South Asia’s Labor Markets

A major new study by researchers from the World Bank, the University of Bari, and the Paris School of Economics has revealed a troubling gap in South Asia’s development story. While millions of people across the region gained access to education over the past few decades, those gains did not lead to equal improvements in jobs, wages, or living standards.

The report, which examined nearly 20 million records from surveys across Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka, argues that inequality in South Asia is still heavily shaped by circumstances people are born into, such as gender, caste, religion, ethnicity, and where they live.

Researchers found that South Asia succeeded in expanding education but failed to remove the deeper barriers preventing disadvantaged groups from turning education into economic success.

Millions Entered Schools, But Mostly at Basic Levels

The study highlights the enormous educational progress made across South Asia since the 1950s. Governments invested heavily in schools after independence, leading to sharp increases in primary school enrollment and literacy rates.

Girls and rural populations benefited the most from this expansion. Countries like Bangladesh and Bhutan recorded especially strong improvements in educational equality, while India, Nepal, and Pakistan also showed major gains. Sri Lanka, which built a stronger education system earlier than most of its neighbors, maintained relatively lower levels of inequality throughout the period.

However, most of the progress happened at the lowest levels of schooling. Large numbers of people moved from having no education to completing primary school, but far fewer gained access to secondary or higher education.

This became a serious problem because labor markets in South Asia reward higher education far more than basic schooling. The study found that primary education alone often provides little advantage in terms of employment or income. The biggest economic benefits come from secondary and tertiary education, which remained inaccessible for many disadvantaged groups.

Women Gained Education but Not Equal Jobs

One of the strongest findings in the report concerns women’s labor force participation. Across South Asia, girls made major educational gains over the past several decades. Gender gaps in schooling narrowed sharply, especially in rural areas where female exclusion from education had once been widespread.

But these improvements did not lead to equal participation in the workforce.

South Asia still has some of the world’s lowest female labor force participation rates. Even highly educated women often struggle to enter paid employment due to social norms, safety concerns, childcare responsibilities, mobility restrictions, and limited formal sector opportunities.

In countries such as India, Bangladesh, and Pakistan, women achieved major gains in secondary education but saw little increase in employment opportunities. The study found that while gender became less important in determining who gets educated, it remained one of the strongest factors shaping who gets jobs.

The researchers argue that South Asia has become more equal in classrooms but not in workplaces.

Labor Markets Still Reward Privilege

The report also found that labor markets across South Asia continue to favor privileged social groups, even among people with similar educational qualifications.

Factors such as urban background, caste, ethnicity, region, and gender still strongly influence access to employment and wages. Rural populations generally remained at the bottom of both educational and economic opportunity rankings, while urban men continued to dominate the top positions.

The researchers discovered that even highly educated individuals from disadvantaged groups often faced barriers in converting their qualifications into stable jobs and better incomes. In some cases, inequality among highly educated groups actually increased across younger generations.

Countries such as Bangladesh and Bhutan showed some signs of rural catch-up growth and modest improvements in economic opportunity, but India, Pakistan, and Sri Lanka displayed much slower progress in reducing inequality linked to social background.

The Next Challenge Is Economic Inclusion

The study concludes that expanding access to schools alone will not solve South Asia’s inequality problem. While education remains essential, the region must now focus on breaking the labor market barriers that continue to exclude women, rural populations, and marginalized communities from economic opportunities.

Researchers say future policies should focus on improving women’s access to employment, expanding safe transportation, supporting childcare, creating more formal sector jobs, and addressing restrictive social norms around female work.

The report ultimately delivers a clear message: South Asia’s educational revolution was a major success, but it has not yet become an economic revolution for millions of people. Unless labor markets become more inclusive, the circumstances people are born into will continue to shape who benefits from the region’s growth.