Report on Labour Market of Bangladesh

8/10/2019 Report on Labour Market of Bangladesh

1/21


2/21

Submitted By: Hall of Fame

Student Name Student Id1. Md. Sarwar Sarker 14204003

1. Sabrina Sadika Karim 14204010

1. Farhana Akther 14204013

1. Md. Sharif Hossain 14204043

1. Tonmoy Ghosh 14204021


3/21

Introduction

What is labour market

Labour markets indicators Labour market size

Labour Market Situation and Employment Structure

Labour Force Participation Rate

Unemployment Rate

Underemployment Rate Employment and Wage

Overseas Employment and Migrant Workers

Sectoral Share of Employment

Child Labour

Labour Regulations and Policies in Bangladesh Ratification and Implementation of the International

Labour Standards

Major Challenges

Conclusion

Recommendation


4/21

Labour market is considered as one of theimportant macroeconomic markets and labour is

the inevitable components of production. Its

importance in broad economical perspective of

growth, stability and development cannot be

denied. In the context of Bangladesh its

importance is several degree higher for itsbeing

densely population with considerable

economically active generation. The purpose of

this report is to estimate the size andcomposition of labour force and its

characteristics .


5/21

A labour market is the place where workers and

employees interact with each other. In the labour

market, employers compete to hire the best, and the

workers compete for the best satisfying job. This is a

nominal market in which workers find paying work,employers find willing workers, and wage rates are

determined.


6/21

The labour force

The participation rate

The unemployment level

The unemployment rate

The employment rate


7/21

Around 148 million in a small territory of1,44,000 square kilometre with a populationdensity of 1028 per square kilometre, thehighest in the world except the city states.

95.6 million workers in 2010, growing 3.39%annually.

2.6 million unemployed in 2010.

The female labour force participation rate

increased from 29.2% in 2005-2006 to 36.0% in2010.

youth labour force of the country increased to20.9 million in 2010 from 17.8 million in 2005-2010.


8/21

Labour market in Bangladesh operates underdifferent socio-economic norms and thereforedifferent segments of the market are not verydistinctive from each other and not mutuallyexclusive.

High rate of labour force growth Low rates of employment growth

Increasing youth labour force

Existence of high underemployment

Increasing share of women employment Wage gap between rural and urban and wage

disparities between male and female workers

Increasing overseas employment

Incidence of child labour.


9/21

Year Bangladesh

Male

Female

Total

1990 91 79.6 14.1 48.8

1995 96 87.0 15.8 52.0

1999 00 84.0 23.9 54.9

2002 03 87.4 26.1 57.3

2005 06 86.8 29.2 58.5

2010 82.5 36.0 59.3

The labour force participation rate (LFPR) in Bangladesh

increased from 48.8 percent in 1990-91to 58.5 percentin 2005-06 to 59.3 percent in 2010. The labour force

participation rate has progressively increased and stood

at 59.3% in 2010.

Figure 1: Labour Force Participation Rate (15 years and

over) in Bangladesh


10/21

The number of people out of work in Bangladesh climbedto 2.5 Million in 2010 from 2.1 million in 2005-06 and from1.7 million in 1999-2000 (BBS, 2010). Bangladeshs openunemployment rate is 4.5 percent, which does not reflecta very large jobs deficit.

0

1

2

3

4

5

6

7

8

9

1999-2000 2005-06 2010

Male

Female

Total

Figure 2: Unemployment rate in Bangladesh

(in millions).


11/21

A large segment of the employed population works lessthan 35 hours a week. This group of people is consideredas underemployed. The rate of underemployment hasincreased from 16.6 percent in 1999-2000 to 24.5 percentin 2005-06 and to 20.31 percent in 2010.

Figure 3:Underemployment Rate in Bangladesh (in %)

0

10

20

30

40

50

60

70

80

1999-2000 2005-2006 2010

Male

Female

Total


12/21

Employment status 2002-03 2005-06 2010

Self employed 19.8 19.9 22.0

Employer

0.2

0.1

0.1

Employee

6.1

6.6

9.4

Unpaid family helper

8.1

10.3

11.8

Day labourers 8.9 8.6 10.6

Household aid 1.2 1.9 1.4

Total 44.3 47.4 54.1

Figure 4 : Shift in Status of Employment 2002-03 to2010 (in millions)

The Labour Force data shows that in 2010, the day

labourers were 19.7 while the employee status was 17.4per cent. The corresponding figure was 8.6 million and 6.6

million respectively in 2005- 06.


13/21

Together with export revenues, migrant worker

remittances constitute a key driver of the economy.

Remittance flow to Bangladesh has increased more than

five-times between 1999-2000 and 2001-10.

10 million Bangladeshi are currently working abroad. From 2001-2010 about 4.2 million people migrated

overseas from Bangladesh.

From 1999-2000 and 2001-10 period with an increase of

remittance flow from 1.9 billion USD to 12.1 billion USD

(Economic Review, 2012). unskilled leaving them vulnerable to low wages, poor

benefits, and a lack of mobility.


14/21

0

10

20

30

40

50

60

Agriculture Industry Service

2002-03

2005-06

2010

Figure 5: Shift in the Structure of Employment (% employed

workforce)

Agriculture continues to remain the main activity to absorb

the vast majority of the labour force. However, with therise of the trade-GDP ratio which was 29.9 in 2000 and

48.35 in 2012. The share of the economy as well as the

share of the employment in the agricultural sector has been

decreasing.


15/21

The last conducted national child labour surveys

conducted by BBS i.e. of 1995-96 and 2002-2003

suggest that Bangladesh has experienced drop of

child labour incidence both in terms of the

aggregate volume and in percentage points asthe child labour has reduced in the span of two

child labour surveys of 1995-96 and 2002-2003.

From the level of 18.3 percentage points of the

respective age group (5 to 14 years) with acorresponding aggregate of roughly 6 million, it

has come down to 14.2 percentage points with

an aggregate difference of 5 million.


16/21

A study (WB & BEI, 2003) finds that labour laws (or labourmarket rigidity) do not feature anywhere among the topseven constraints to business operation and growth inBangladesh as because labour laws apply to a smallsegment of the economy and the labour market is veryflexible in the vast informal sector. Even in the formal

segment of the economy, the labour market is ratherflexible due to weak enforcement of the laws.

Minimum wages are specified at different levels fordifferent sectors.

Low are revised very infrequently.

Government has insufficient institutional capacity toenforce labour laws and policies.

inspectors covering the entire country for where there are24,229 registered factories, three million shops andestablishments, and two ports

The countrys eight Labour Courts have insufficientcapacity to process their caseloads


17/21

Bangladesh has so far ratified 33 ILO Conventions

of which 7 (except Convention 138 related to the

Minimum Age) are fundamental. While legal

provisions exist to maintain the fundamental

principles of the labour standards and to protectworkers rights, the implementation of the laws

is weak. Majority of the workers are engaged in

the informal sectors where legal protection is

non-existent. A number of non-compliance issueswith international labour standards in law and in

practice have been brought to the attention of

ILO supervisory bodies which are mentioned in

Committee of Experts (CEACR) reports.


18/21

Review of employment creation experience in Bangladesh

suggests that employment growth has been able to keep pacewith the growth in labour force resulting in low openunemployment. Employment has grown faster in manufacturingand services relative to agriculture leading to a fall inemployment share of agriculture.

The average productivity of labour remains very low.

Over 60 percent of the agricultural GDP comes from crops, which

is dominated by food grain. Export ban on food grain aimed at keeping food prices low for

domestic consumption limits the profitability of the crop sector.

The ability to diversify agriculture will play an important role inraising real wages and incomes of people who remain engaged inagriculture.

Expansion of services export from Bangladesh. Skills development- more specifically of mid-level management

Testing facilities supporting various types of exportable need tobe developed to meet compliance issues.

The quality and productivity of labour force is another challenge.

There are serious concerns about employment standards and

safety of workers .


19/21

Bangladesh labour market is successfully makingtransition from low productivity agriculture sectorwork to more productive non-farm work in both ruraland urban areas. This process has to be continuedand accelerated, with support from the government,so that a larger proportion of labour is employed in

more productive and better paid jobs.Unemployment among young people is relativelyhigh. This suggests the need for employmentgeneration for the youth at a faster rate to offeryoung workers good employment opportunity. Thereare major challenges in the education system that

must be met to provide the foundation required for amore productive labour force.

Labour market policies should be essentially linkedwith poverty alleviation policies. Opportunity ofproductive employment is the key way to achieve abetter quality of life.


20/21

As we have seen, the labour force participation overthe year increases but job opportunity does notincrease in such a way that the country can absorb allthe additional labour force. So the focal point is tocreate the job opportunities. Keeping this in mindthe policy should include the following strategies:

Absorb the unskilled and semi-skilled labour force

Introduce work-sharing program and fix maximumworking hours that will reduce unemployment.

Accelerate the economic growth rate using the

macroeconomic components Encourage the labour force to migrate overseas.

Investment in the service sector and manufacturingsector should be encouraged.

Urge foreign investors to invest in Bangladesh.


21/21

PRESENTED BY: HALL OF FAMEMBA, IUBAT.

SUBMITTED TO:Md. Zahir Rayhan SalimFaculty, IUBAT.

Report on Labour Market of Bangladesh

Documents