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Tshering Chokiand Alvin Etang1 Poverty and Equity Global Practice,South Asia RegionPublic Disclosure Authorized Executive Summary Youth unemployment is aprevalentglobal challenge, particularly significant in countries likeBhutan, where nearly half the population isbelow the age of 30.This research study focuses onunderstanding the challenges and constraints faced by Bhutanese youth, particularly women, inaccessingemployment opportunities.It highlights the importance of providing qualityemployment opportunities for youth and the potential economic benefits of increasing femalelabor force participation. The study aims to better understand the current situation and identifythe specific challenges and opportunities in different economic sectors.For women, the researchfocuses on three key areas: the impact of restrictive social norms, constraints across varioussectors, and women's engagement in income-generating activities and microenterprises. Foryouth, the study delves into understanding thedrivers of economically motivated migrationacross the three economic sectors. The research questions are categorized into three main sections: labor force participation, jobacquisition, and self-employment, seeking to unravel the complexities of constraints faced bywomen and youth.Utilizing a conceptual framework derived from the World DevelopmentReport 2012, the study explores the role of informal and formal institutions, as well as marketdynamics in shaping employment-related outcomes for women in Bhutan. This framework,initially developed for gender equality, proves relevantin understanding societal conditions andindividual outcomes for the youth cohort. Employing a qualitative approach, the study optimized onfocus groupsdiscussions with relevantstakeholdersand key informant interviews across three distinct study areas: Thimphu (services),Chukha (industry), and Dagana (agriculture). The selection of these areasisaimedto addressspecific urban and rural issues. Both primary and secondary data, drawn from multiple reports,contribute to aninclusiveanalysis of youth and female unemployment. Unemployment challenges are linked to government systems, private sector growth, and theevolving education system's ability to equip youths with necessary skills.The study identifies agrowing trend of promoting entrepreneurial skills in Bhutanese schools and colleges, reflectingin the education curriculum. However, challenges arise as the current youth generation navigatesthe dilemmas of acquiring practical skills independently. Gender-based disparities persist ineducation, with a notable gender biasin STEM subjects, influenced by societal expectations. Thelack of inclusiveness in education facilities poses challenges for students with disabilities. Women employees, especiallythe working mothers, face challenges due to the absence ofchildcare facilities at workplaces. Despite efforts such as extended maternity leave, there is aneed for more sustainable solutions to address fertility rates and support workingparents.Thestudy recognizes the impact of changing climatic conditions on women, especially in rural areas,and addresses the significant unpaid household and care work performed by women. Concerns about out-migration and its economic implications, particularly in the tourism sector,are voiced by respondents. The study advocates for enhancing digital marketing capacities inagriculture, emphasizing the need for youth and female empowermentin this sector. It alsosheds light on the emotional and societal challenges faced by the youth, including low self-esteem, social stigmas, and the impact of emigration on the economy. In conclusion, the study contributes valuable insights into the multifaceted challenges of youthand women in accessing employment opportunities in Bhutan. The recommendations derivedfrom this research aim to inform policies that foster inclusive and sustainable development,addressing the identified issues to propel the nation toward its developmental goals. Acknowledgments We would like to express our sinceregratitude to the following individuals and organizations fortheir invaluable contributions and support throughout the course of this research:Aum KunzangLhamu(DoEE, MoICE),National Statistics Bureau (NSB),The Acting Secretary, GovernmentTechnology (GovTech) Bhutan,Dr. Sonam Choki(NCWC),Mr. Pema Namgyal(General Secretaryand memberof Association of Bhutanese Industries), Mr. Tempa Gyaltshen,Ms. Dorji Lhamo(Royal University of Bhutan),Mr. Tashi Wangdi(Impact HubThimphu),Mr. Kinley Dorji(DrukBeer),Ms. Leki Wangmo(Bhutan Lottery Limited),Ms. Tenzin Choden(Chief, WPID, DWPSD,MoESD),Ms. Tshering Yangki(DoEE, MoICE),Mr. Chencho Wangyal(Karma Feeds),Mr. KinleyNamgay(Dzongkhag Agriculture Officer, Dagana),Members and Chairperson Daga SanamThuenkey Detshen (DSTD),Chairperson(Thuenpa Puenzhi Detshen),Youth Farmers Group(Tsankha),Their support, expertise, and collaboration have been instrumental for the success ofthis res