A Comparative Analysis of the Employment Situation in Bangladesh. Potential Sectors and Required Policies for Employment

Table of contents

1. Introduction
1.1. Methodology and Data Sources

2. Demographic Dividend and Economic Active Population in Bangladesh
2.1. Labor Force Characteristics and Employment Situation of Bangladesh
2.2. Unemployment Situation of Bangladesh

3. Potential Sectors of Employment in Bangladesh
3.1. Small and Medium Enterprises (Smes)
3.2. ICT Sector
3.3. Vocational Training and Overseas Employment
3.4. Employment in RMG Sector
3.5. Policy Suggestions

4. Conclusion

5. References

Abstract

Bangladesh is a country with 163 million people where employment is the major source of income and livelihood for most of the economic active people. The labor force is growing in Bangladesh at higher rate than the rate of growth in population. In 2015 Government of Bangladesh claimed that the labor force participation rate was 57.1 percent with 4.3 percent unemployment rate which was about 2.6 million in number. As the country is experiencing its first demographic dividend these young population demand both quality and quantity opportunities in the employment sector. The main objective of the paper was to provide an understanding of employment situation of Bangladesh. The study found the vulnerable situation of job opportunity and underemployment with gender and region specific discrimination. The findings also showed that small and medium enterprises (Smes), ICT Sector, vocational training and overseas employment and employment in RMG sector were potentials sectors of employment opportunities for Bangladesh.

1. Introduction

Employment is a major source of income and livelihood for most of the people of Bangladesh. According to PRB (2016) Bangladesh is a country of 163 million people in which 12.9 % of the total population live in extreme poverty (World Bank 2016).This poverty & employment are highly associated with each other. Poverty reduces with betterment in employment. On the other hand employment creates opportunity & capability to purchase better goods and services. That’s why employment issue has been included in MDGs, SDGs & also in government policies of Bangladesh for the development of the country. One of the main development challenges for Bangladesh is providing enough jobs both in number and quality for the new entrants into the labor force and who are experiencing underemployments. The labor force is growing in Bangladesh at higher rate than the rate of growth in population. This is likely to persist over the next two decades or longer because the country is going through of its first demographic dividend. Bangladesh is experiencing third stage of demographic dividend with its huge youth bulge as a result of declining population growth & transition from high stationary to late expanding. According to Bangladesh Bureau of Statistics (2015), the labor force participation rate is only 57.1% with 4.3% unemployment rate which is about 2.6 million in number where female are more vulnerable 7.3% than male 3%. Still 54.9 % of the economically active population is related with non-agricultural job sector. Data also shows Bangladesh is experiencing 20.3% underemployment rate. Providing quality jobs for this huge population is a challenging issue. This paper seeks to provide an understanding of employment situation of Bangladesh analyzing potential sectors and required policies for employment.

1.1. Methodology and Data Sources

The study follows an analytical research. Data were collected form secondary sources. Sources of data were several government conducted survey specially “Labour Force Survey 2013”with different published journals, books and reports. Data were also collected from different concerned non-government organizations. This paper has used simple statistical tables and graphs to analyze the issues.

2. Demographic Dividend and Economic Active Population in Bangladesh

According to BBS (2011) age distribution of Bangladesh shows that the largest reproductive segments are 10-14 &15-19 which refers to the adolescents group according to UN definition (10-19 aged group) contributes about 19% of the total population of the country. The population pyramid of the country shows that Bangladesh is experiencing youth bulge as a result of declining population growth & transition from high stationary to late expanding (3rd stage of demographic transition) where it has already entered into demographic dividend because the data was taken from 2011 census. Whatever, it will last till 2033 (Alam, 2012). According to UNFPA (2014) 47.6 million or 30 percent of the total 158.5 million people in Bangladesh were young (10-24 years. This means that Bangladesh needs to invest right now transforming these youth economic active population into human resource if it wants to reap the benefits of demographic dividend. Nabi (2011) said that this demographic opportunity can bring a huge dividend, if this labour force is converted into resource. As this window of opportunity opens for a population only once of its history. If Bangladesh fails to grab this demographic opportunity as early as possible, this huge number of economic active population can create a disastrous hazard for the nation.

2.1. Labor Force Characteristics and Employment Situation of Bangladesh

Small size of the employment generation with a huge number of population is the main problem for Bangladesh. It has experienced a long structural economic change since its independence. The country has moved from an agrarian to an industry and services sector based economy gradually. Although the country is experiencing demographic dividend but the number of unemployed people has increased over the years.

Table 1 shows that the economically active population of the country is increasing day by day. In 2002-03 it was 46.3 million and in 2013 it is 60.7 million. Data shows that women were less in number among economically active population in Bangladesh. Table also shows that 58.1 million population are employed where women were again lag behind. Refined activity rate of labor force participation rate of the country shows that 57.1 % of economically active population is participating in labor force. Among male it is 81.7 percent and among female 32.9 percent.

Table 1 Characteristics of labor force in Bangladesh

illustration not visible in this excerpt

Source: Bangladesh Bureau of Statistics, Labor Force Surveys 2013

As shown in figure 1 the proportion of population aged 15 and above who were currently economically active in 2013 was 57.1 percent. By sex the rate was higher among male as mentioned earlier and by region the rate is slightly higher in rural area than urban.

Figure 1 Labor force participation rate by category

illustration not visible in this excerpt

Source: Bangladesh Bureau of Statistics, Labor Force Surveys 2013

Table 2 shows the employed population by broad economic sector. The largest population of the country was involved in agriculture 45.1 percent followed by 34.1 percent in service and 20.8 in industrial sector. More than half of the rural population was involved in agriculture 56.2 percent and more than half of the urban population was involved in service sector.

Table 2 Employed population by broad economic sector (%)

illustration not visible in this excerpt

Source: Bangladesh Bureau of Statistics, Labor Force Surveys 2013

Figure 2 illustrates the percentage proportion of employed person by years in broad economic sector. The proportion of population who were involved in agricultural sectors is decreasing overtime where people involving in nonagricultural sector is increasing in Bangladesh.

Figure 2 Proportion of employed person by economic sector (%)

illustration not visible in this excerpt

Source: Bangladesh Bureau of Statistics, Labor Force Surveys 2013

In Bangladesh 87.4 percent were involved in informal sector. Female were large in number than male. Contribution of informal sector was higher in rural area 92.8 percent than urban 75.1 percent. Urban population has most involvement in formal employment which was about two times higher than national figure.

Figure 3 Employed population by formal & informal employment (%)

illustration not visible in this excerpt

Source: Bangladesh Bureau of Statistics, Labor Force Surveys 2013

Table 3 indicates that largest share of the employed population is involved in skilled agricultural, forestry & fisheries sector where women are more involved than male. 18.1 percent are involved in Craft & related trade sector then Service and sell sector 19.7 percent where male are more in number than female in this sector . 13.5 percent are also involved in Elementary occupations.

Table 3: Employed population aged 15 and above by occupations

illustration not visible in this excerpt

Source: Bangladesh Bureau of Statistics, Labor Force Surveys 2013

Table 4 shows that most of the people in the country are own account workers where 40.6 percent are following employee. Own account worker is a mainly male dominating sector than females. Women are mostly involved as family helper in Bangladesh.

Rural people are more involve in own account worker than urban and urban people are more involved as employee than rural people. Interesting thing is that rural people involved more as family helper 21.3 percent than urban 9.9 percent.

Table 4 Status of employment by area & sex

illustration not visible in this excerpt

Source: Bangladesh Bureau of Statistics, Labor Force Surveys 2013

Figure 4 shows the distribution of self-employed persons by years. It shows that the number of self-employed person is increasing since 2002-03 and it is continuing to increase. In 2002-03 it was 19.8 percent and now in 2013 it is 23.6 percent.

Figure 4 Distribution of self-employed person by years

illustration not visible in this excerpt

Source: Bangladesh Bureau of Statistics, Labor Force Surveys 2013

Trend of youth labor force in million below the figure 5 shows that both male and female is increasing overtime. There is a significant change which is growing rate of females are higher than the male.

Figure 5 Trend of youth labor force in Bangladesh

Abbildung in dieser Leseprobe nicht enthalten

Source: Bangladesh Bureau of Statistics, Labor Force Surveys 2013

2.2. Unemployment Situation of Bangladesh

Bangladesh Bureau of Statistics (BBS) conducted Labor force survey 2013 where it adopted the definition of ‘Unemployment’ is given by International Labor Organization (ILO) that a person is considered as unemployed if he/she do not work at all during a week (even an hour) and is actively looking for work or is available for work but does not work due to temporary illness or less availability of job including his age should be 15 years and over.

The data shows that 4.3 percent of the economically active population is unemployed. Women are more unemployed than male in Bangladesh. The trend shows that unemployment rate for female is increasing overtime where it is decreasing for male over the years. According to BBS 2013 the rural people were more unemployed 5.7% than urban 3.7%.

Table 5 Trend of unemployment in Bangladesh

illustration not visible in this excerpt

Source: Bangladesh Bureau of Statistics, Labor Force Surveys 2013

Figure below shows that unemployment rate is higher in rural areas than the urban area which is also higher than the national figure.

Figure 6: Unemployment rate by area

illustration not visible in this excerpt

Source: Bangladesh Bureau of Statistics, Labor Force Surveys 2013

Figure 7 shows that unemployment was highest among higher secondary level 7.9 percent followed by tertiary level 6.7 percent. For less educated groups (primary, none and others) unemployment were less than then the national average.

Figure 7 Unemployment rate by education level

illustration not visible in this excerpt

Source: Bangladesh Bureau of Statistics, Labor Force Surveys 2013

According to Labor force survey Bangladesh 2013 underemployment occurs when a person works less than 40 hours in the reference week. In 2013 2.3 million employed person 4 percent were underemployed. Among them 1.6 million were male and 0.7 million were female. Majority of them lived in rural areas around 1.8 million compare to 0.5 million in urban areas. The survey shows that the underemployment was higher among young than other age category.

The labor force participation rate of Bangladesh showed that men were more economically active employed & their labor force participation rate is higher than women which should be addressed to achieve demographic dividend in the context of the country. Although female labor force in Bangladesh has significantly increased over the last two decades. But most of them are involved in paid labor force. This rapid increase in the participation of women in labor force can be termed as feminization of labor which is a product of the increasing number of textile and garment industries (Titumir, 2013). Again most of the people are involved in low paid jobs because of their emergency (Rahman, 2013). The supply of labor is higher than the demand which leads low paid jobs in Bangladesh. Most of the people in Bangladesh is involves in agricultural sector but industrial & service sectors are two potential sectors among the economic active population. The growing trend of non-agricultural sector involved labor force which is higher in number than the agricultural sector involved people is an indicator that the country is now shifting its economy to agricultural based economy to industrial & service based economy day by day.

The labor force of Bangladesh is mainly based on informal sector. According to Ali (2013) the informalization of labor market are associated with multiple reasons. Most of them are being exploited from formal sector, job crisis and due to their lack of skill. His research also found out that lack of education and social networking are also responsible for this. Political connectivity of government or opposition party is also a vital factor for being involved in informal sector. Largest share of the employed population of Bangladesh is involved in skilled agricultural, forestry & fisheries sector where women are more involved than male. Females are mostly family works in the context of Bangladesh. Due to economic, social, cultural and political perspective of gender discrimination and lack of inequality are the main reasons for this (Islam, 2014). Lack of training & education were found two crucial factors for women not involving in formal & paid economy. According to World Bank (2011) .The growing trend of own account worker that means self-employed with no employee has reduced poverty in Bangladesh. The increasing rate of unemployment in rural area is an issue to be addressed.

According to the Quarterly Labour Force Survey Bangladesh 2015-16 done by the Bangladesh Bureau of Statistics, rural areas have 18.2 lakh unemployed people, more than double the number urban areas 7.7 lakh. Lack of access to quality education, training and technical support may be the reasons behind it. In Bangladesh, unemployment increases with the increased level of education. Higher secondary passed population are mostly unemployed following tertiary passed people. The lack of quality, applied & skilled based approach of education may be the issues in the context of Bangladesh for both unemployment & underemployment.

[...]