Ms So Hengvotey, Programme Manager, Research Data Hub, CDRI
Dr Song Sopheak, Senior Director, Centre for Educational Research and Innovation, CDRI

Key messages

• Cambodia employed more than 9.1 million people in 2025, with a labour force participation rate of 71.6 percent.
• The service sector is now the largest employer (43 percent), overtaking agriculture for the first time. This marks a dramatic shift from 2000, when agriculture accounted for nearly three in four jobs.
• More than three in four workers (76.7 percent) are in informal jobs—with no sick leave, no pension contributions, and no written contract.
• Young people face an unemployment rate of 9.8 percent—nearly three times the national rate—and 13.1 percent of 15–24-year-olds are not in employment, education, or training (NEET).
• Cambodia's labour market has proven resilient, but reskilling and upskilling are essential to secure sustainable, quality jobs.
• Vocational graduates have the highest labour market participation of any education group, pointing to a mismatch between higher education qualifications and what employers need.

Cambodia’s record on job creation is impressive. In 2025, more than nine million people were employed, giving a labour force participation rate of 71.6 percent. Over the past 25 years, the country has moved from an overwhelmingly rural, agricultural economy to one where services and industry now account for nearly three in every four jobs. That transformation has lifted living standards for millions of people.

The fifth in a series dating back to 2000 and the first to be conducted entirely using tablets, the Cambodia Labour Force Survey 2025 (CLFS 2025) provides important evidence of a persistent employment-quality gap alongside labour-market growth. More than three in four workers (76.7 percent) are in informal jobs. Young people, including many with qualifications, struggle to find stable work. And a large share of the workforce is in sectors where job security and wages remain precarious. The big question is not whether Cambodia is creating jobs, but whether Cambodia is creating good jobs.

From the fields to shops and factories—but are these good jobs?

Cambodia’s labour market over the past two decades has not been about the number of jobs—it has been about where people work. In 2000, agriculture employed 72.6 percent of all workers. By 2025, that share had fallen to 27.6 percent. Services, which employed just one in five workers in 2000, is now the largest sector at 43 percent. Industry grew from 6.8 percent to 29.4 percent over the same period.

Figure 1: Employment by sector, 2000–2025 (% of total employment)

Source: CLFS 2000, 2012, 2019, 2025, National Institute of Statistics, Ministry of Planning.

This shift has created real opportunities. Industrial jobs, particularly in garment manufacturing, have drawn hundreds of thousands of workers, especially women, into paid employment and offered wages and conditions better than subsistence farming. That is a genuine gain.

According to Figure 1, job quality raises a big question mark in spite of the progress. Services, which now employ 43 percent of the workforce, is a broad category that runs from bank tellers and teachers to street vendors and domestic workers. Much of Cambodia’s service employment sits at the informal, low-wage end of that spectrum in wholesale and retail trade (18.2 percent of all employment) and accommodation and food services, where contracts and benefits are rare.

In garment manufacturing, which accounts for the bulk of industrial employment among women, jobs are concentrated at the lower end of the global supply chain. Wages are low relative to other middle-income countries. The sector faces growing pressure from competing low-wage producers, automation of production lines, and the reshoring of manufacturing to developed countries. Recent changes to US trade tariffs add further uncertainty to an already competitive market.

Construction, the other large industrial employer and a sector dominated by men, offers work for low-skilled workers from rural areas, but it is one of the most volatile sectors in any economy. Cambodia built heavily in recent years, particularly in real estate and tourism infrastructure. The boom has since reversed: an oversupply of property, rising bank debts tied to the sector, and a prolonged slowdown have reduced construction activity and the jobs that came with it.

The shift away from agriculture is a structural change Cambodia cannot reverse and should not want to. But the CLFS 2025 data suggest that for a large share of the workforce, the new jobs are not yet secure, well-paid, or protected. Moving from more jobs to better jobs is the next challenge for Cambodian labour market policy.

Young and educated—but struggling to find good work

Cambodia has a young workforce. Figure 2 shows that about 41.9 percent of working-age people are aged 15–34. In principle, this is an advantage: a large, young labour supply supports economic growth. In practice, many young Cambodians are finding it difficult to enter the labour market on good terms.

The youth unemployment rate stands at 9.8 percent nearly three times the national rate of 3.6 percent. More strikingly, 13.1 percent of people aged 15–24 are NEET: not in employment, education, or training. That is roughly 383,000 young Cambodians who are neither building work experience nor upgrading their skills.

Figure 2: Labour force participation rate by age group and sex, 2025 (%)

Source: CLFS 2025, National Institute of Statistics, Ministry of Planning.

The data on education and participation tell a nuanced story. Young people with vocational qualifications have the highest labour market participation rate of any educational group at 84.5 percent. Yet participation does not rise consistently as education levels increase; graduates of higher education face higher unemployment rates than vocational graduates, a pattern that may point to a mismatch between what universities produce and what employers need.

CDRI’s own research on skills and qualifications in Cambodia has identified this gap—the CLFS 2025 skills mismatch module, which is not yet published, should provide further evidence once released. The policy implication is significant: investment in technical and vocational education and training (TVET) pathways, alongside other education, may better connect young Cambodians to the labour market than expanding higher education alone.

The informal sector: A route into work, but not always a route to good work

One of the most striking findings of the CLFS 2025 is the scale of informal employment in Cambodia. More than three in four employed people, 76.7 percent work informally. That means no sick leave, no employer pension contributions, and no written employment contract. This is not a marginal group: it is most of the Cambodian workforce.

Informality plays an important role in a developing economy. It provides a relatively low-barrier route into employment for workers who might otherwise have no income or move to work in the city. Own-account workers are people running small farms, market stalls, or service businesses for themselves who make up 22.2 percent of all employed people. Contributing family workers, who work in household enterprises without pay, account for a further 2.8 percent. For many, informal work is a practical starting point, particularly in rural areas where formal employment is limited.

But the CLFS 2025 also identifies a newer and more ambiguous category: dependent contractors, who make up 19.9 percent of the employed population, nearly one in five workers. These are formally classified as self-employed, but who work almost entirely for one client or company, under conditions that the company controls. They carry the risks of self-employment without the independence. This category is appearing at scale for the first time in Cambodian labour data, and no specific legal framework currently addresses their situation.

The policy challenge is not to eliminate informality, which would be neither realistic nor desirable in the short term. It is to improve the conditions of informal workers progressively. That means expanding social protection to own-account workers and family workers, developing a regulatory framework that recognises the position of dependent contractors, and making it easier for small businesses to formalise over time.

Labour market absorption and resilience

The return of approximately 910,000 Cambodian migrant workers following the July 2025 border conflict created a major labour market shock. Yet Cambodia responded with remarkable labour market resilience. CDRI research shows that around 60 percent of returnees quickly secured employment in manufacturing, agriculture, services, and other wage jobs. This demonstrates the economy’s strong employment absorption capacity. However, rapid job creation does not necessarily mean the creation of good jobs.

For many returnees, finding work was an immediate survival strategy rather than a pathway to better livelihoods. Although employment helped stabilise household incomes, average earnings after returning remained about 37 percent lower than wages previously earned abroad. Many workers also shifted into occupations that did not fully utilise the skills they had developed overseas.

Before returning, most migrants worked in construction (40.9 percent), manufacturing (33.5 percent), and agriculture (13.4 percent), earning around USD400–500 per month. After returning, only one-quarter found jobs in similar sectors, while nearly 35 percent entered the factory. Although the garment sector played a critical role in absorbing labour, it offered limited opportunities to match workers' previous experience and skills.

The next challenge is therefore not simply creating jobs but creating better jobs. Nearly six in ten returnees reported a need for additional training to adapt to Cambodia's labour market. Expanding technical and vocational education and training (TVET), together with targeted upskilling and reskilling programmes, will be essential to improving job quality, raising productivity, and transforming the return of migrant workers into a long-term source of economic resilience and brain gain.

What the evidence suggests for policy

The CLFS 2025 does not just describe the labour market; it points to areas where policy attention is most needed. Three priorities follow directly from the evidence above.

1. Raise the quality of service and industrial jobs. Cambodia’s sectoral shift is an achievement, but garment manufacturing and much of the service sector remain at the low-wage, low-security end of the market. Industrial upgrading, moving into higher-value manufacturing and skilled services, is essential to improve job quality with higher skills, better pay, and protected jobs for the workers who have already made the shift from agriculture.
2. Invest in vocational pathways and address the skills mismatch. The CLFS 2025 data confirm that TVET graduates enter the labour market at higher rates than higher education graduates. Government and development partners should expand TVET provision, establish graduate employment tracking, and work with employers to align curricula with what the market needs.
3. Extend social protection to informal and dependent workers. With 76.7 percent of workers in informal employment and 19.9 percent classified as dependent contractors, the existing social protection framework leaves the majority of Cambodia's workforce without a safety net. Expanding access to pensions, sick pay, and accident coverage starting with own-account workers and dependent contractors is a practical and necessary step.

Looking ahead

This blog provides an overview of Cambodia’s labour force in the context of the country’s socio-economic development, drawing on the full microdata from the CLFS 2025.

Building on this overview, future analyses will explore specific themes in greater depth to better understand the labour market and job quality gaps highlighted by the survey. CDRI will continue to analyse the data and publish evidence-based insights as additional findings become available.

This is the first blog in a series based on the CLFS 2025. Upcoming blogs will examine labour force and employment trends, job quality in both the formal and informal sectors, and the role of skills development in improving labour market matching and creating better jobs in Cambodia.