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"Further the labour force is ageing. A young educated and growing labour force can stimulate economic growth. An older work force will be slower to innovate and adopt new technologies unless they are retrained constantly."
But Sri Lanka's labour force participation rates for women and youth were still "fairly low" the IPS said.
According to Sri Lanka's statistics office, the labour force participation rate has fallen from 50.3 percent in 2010 to 47.2 percent in the second quarter of 2012.
Male participation had fallen from 67.
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2 percent to 66.7 percent. Female participation in the labour force had fallen to 33.9 percent to 29.8 percent.
The IPS said a large number of people leave the country for foreign employment. The labour force had increased by 128,000 from 2010 to 2011, and the departures for foreign employment were 263,