Female unemployment and Policy Suggestions: Bangladesh
The issue of women’s contribution to the economy has come to the forefront of development debate in most countries, amid growing concerns about gender inequality and the consequent social and economic consequences. It is undeniable that the integration of women’s contributions is necessary for all economies for reasons of fairness and efficiency. It is now widely recognized that women’s participation in the labor market enhances their relative economic status and, from a broader perspective, stimulates economic efficiency and potential for development.
However, traditional gender norms and patriarchal values often limit the movement of women and limit their activities in the labor market. This scenario is particularly prevalent in countries in South Asia, where women are much less involved and focused in low-wage activities than men. Researchers have found a positive association between female labor force participation and economic growth. Using a 40yearlong panel dataset, Klasen and Lamanna (2008) find a positive impact of a reduced gender gap in employment and education on economic growth.
This finding is in line with those of Galor and Weil (1996), who find a positive relationship between growth and gender equality and argue that, through the channels of reduced fertility and creation of human capital, a lower gender gap contributes toward economic development. Cavalcanti and Tavares (2007) emphasize the fertility reduction and growth-enhancing effect of female labor market participation.
A few other studies (e.g. Blacker and Seguino, 2002) highlight the growth-enhancing effect of export-oriented industrialization supported by the female labor force. In a cross-country context, while analyzing the relationship between economic development and female labor market participation, some researchers have found a U-shaped pattern (Goldin, 1995; Verick, 2014; Heath and Jayachandran, 2016).
Goldin (1995) explains this by the predominance of agricultural activities with the low gross domestic product (GDP), followed by reduced agricultural activity and reduced female labor force participation. In the later stages of development, higher economic growth driven primarily by the activities of the services sector is likely to encourage women’s participation in the labor market by gradually moving away from domestic activities (Goldin, 1995; Rahman). In addition, Islam, 2013).
However, we do not find that this U-shaped relationship is consistent across countries. Female employment has been found to increase with varying trends in most developing countries (Heath and Jayachandran, 2016). In Bangladesh, women’s contribution to the economy is much smaller due to their less participation in the labor market. While women make significant contributions to non-market activities such as domestic work and caring for children and the elderly at home, a key factor in ensuring comprehensive economic growth is market-based production activities.
The goal is to significantly increase the participation of women in the country. In addition, it is not just because of economic efficiency that more women’s participation in mainstream economic activities is important. It is also important for greater equity and in terms of comprehensive growth. Women’s economic empowerment can pave the way for poverty reduction and fairness improvement (both women and children), and for women’s overall empowerment in the socio-political field. Increasing and improving labor market participation helps women have greater influence and voice in decision making.
The level of female employment in Bangladesh has been lower than that for men because of both demand and supply-side issues. On the supply side, women`s labor market participation depends on a number of socio-economic factors, including household income, age, marital status, education, household dependency ratio, etc. In contrast, from a demand-side perspective (i.e. firms` demand for female labor), female employment can depend on factors including firm size, firm nature, the technology used, location, etc. There are also some sector-specific issues that can affect the expansion of women`s employment in certain economic activities.
LITERATURE REVIEW ON WOMEN EMPLOYMENT
The literature on woman’s employment hugely emphasizes the deliver-aspect perspective – that is, the elements affecting households` woman members` choice to take part in the hard work marketplace. In phrases of technique and desire of various factors influencing women’s hard work pressure participation, researchers have included some of socio-demographic in addition to family-particular variables of their econometric evaluation of woman’s hard work deliver.
Blau and Khan (2006) take into account the effect on own circle of relative’s earnings of wages of each women members and their spouses even as controlling for earnings from different sources. Klasen and Pieters (2013) use the proportion of family earnings earned in ordinary salaried employment and additionally with the aid of using the variety of underemployed people inside the family.
Mahmud and Bidisha (2018) encompass variables for family head`s schooling to seize the socioeconomic function of the family, and, even as thinking about that a full-size percent of ladies are hired in rural farm-primarily based totally sports as unpaid own circle of relatives workers, encompass family head`s occupational dummy (whether or not self-hired or now no longer) with inside the evaluation.
In a widespread hard work delivery function, schooling is regularly covered as a key determinant of hard work deliver, and a maximum of the literature unearths a full-size fantastic effect of schooling at the hard work deliver a choice of ladies (Rahman and Islam, 2013; Mahmud and Bidisha, 2018; Raihan and Jahan, 2018). A few studies, which include that of Andrabi et al. (2013), with inside the context of Pakistan, and Baird et al. (2016), however, do now no longer discover a robust affiliation among schooling and hard work marketplace participation. This locating consequently highlights that, to acquire the fantastic effect of schooling on hard work deliver, it’s miles critical that jobs be such that they praise schooling (Heath and Jayachandran, 2016).
Klasen and Pieters (2013) and Mahmud and Bidisha (2018) include variables for whether a woman lives with her parents-in-law, gaining compassionate responsibility, and decision-making power for the woman. .. Huq (2015) emphasizes the importance of unpaid long-term care workers in the context of Bangladesh.
Given the prevailing gender norms associated with reproductive responsibility in Bangladesh, studies such as Rahman and Islam (2013), Mahmud and Bidisha (2018), Raihan and Jahan (2018) include children under the age of five. Contains a variable for whether or not the year indicates the age of the household. Most studies use rural dummies to capture the differences between rural and urban areas. Some (Mahmud and Bidisha, 2018; Rahman and Islam, 2013) also contain partition dummies.
One of the key methodological challenges in estimating the determinants of labor force participation, especially in developing countries, addresses the fact that unpaid but labor-employed people have no wages. That is. Crediting the wages of unpaid workers in such cases can lead to indigenous peoples’ problems. Researchers have developed a number of strategies to address such issues. For example, in estimating wage elasticity for married women, Heim (2007) uses predicted wages and follows Mroz (1987)’s original research. This survey uses a two-step Heckman procedure to obtain selectively adjusted wages.
This will be used later in the labor supply equation. Based on the concept of a bargaining model, Blau and Kahn (2006) estimate two regression equations. The first equation contains only data on women’s wages, and the second equation contains spouse’s wages to explain the impact of spouse’s wages on workforce participation.
Klasen and Pieters (2013), in the context of India, use predicted wages to incorporate the wage of the unpaid participants and apply two similar specifications. In one specification, they use wage variations across districts; in the other, they use the variation across different states and age and education groups. As these two variations generated very different estimates, it was not possible for the authors to conclude anything specific regarding the impact of wage on female labor force participation.
WHAT FACTORS AFFECT FEMALE LABOUR FORCE PARTICIPATION IN BANGLADESH?
Given that, the labor market position of an individual is determined through the interaction of both demand and supply-side factors, to stimulate the labor market participation of women it is crucial to understand the contributing/impedimentary factors on both sides of the market. This section, using the latest nationally representative labor market data, examines the impact of different sociodemographic as well as household, and regional factors on women`s labor supply decision.
The aim of this exercise is to identify the constraints to women`s engagement in the labor market from a supply-side perspective, to aid relevant policy formulation. This exercise is carried out primarily by utilizing the latest Quarterly Labor Force Survey (QLFS) of 2016/17 – the most recent nationally representative dataset on the labor market of Bangladesh – and by applying standard econometric methods.
From an empirical point of view, the estimation of female labor supply differs from that for men because of various socioeconomic constraints as well as the reproductive burden that women bear. In particular, the patriarchal social structure sets certain implicit gender norms that often act as barriers to women’s mobility and empowerment, thereby negatively affecting their participation in the labor market. In order to understand the labor supply decision of females, we estimate the standard supply function while putting the determinants of female labor force participation into certain broad categories:
- Individual factors: A number of demographic and educational variables have been included in the analysis – for example age and age-squared of the respondent, education level of the respondent (dummies of below primary, primary and secondary completed, Secondary School
Certificate (SSC)/Higher Secondary Certificate (HSC) passed, the university passed) and marital status of respondent (dummy variable of married or not).
- Household factors: In addition to individual factors, the existing literature argues in favor of incorporating different household factors – for example, household socioeconomic structure –as determinants of labor force participation. Here, we have included variables such as net family income (net income of the household, which excludes respondent’s own income) and amount of land owned by the household (in decimals). In addition, two variables related to the household head’s occupation are included: whether the head is self-employed or not and whether the head is employed in agriculture. The rationale for including these variables is that head’s occupation can influence other members’ occupational choice, and such factors can be crucial in countries like Bangladesh, where family-based employment is prevalent. For similar reasons, variables representing the head’s education (primary and secondary completed, SSC/HSC passed, the university passed) have been incorporated into the analysis.
- Gender norm variables: In addition to the conventional variables used in standard labor economics, relevant literature (e.g. Mahmud and Bidisha, 2018; Raihan and Jahan, 2018) consider variables like whether there are any young (below five years) children in the household as an additional variable reflecting women’s reproductive and care burden. Besides this, we include a total number of children in the household to understand the effect of both gender norms and financial requirements on the household.
- Geographical variables: In the absence of supply-side variables, it is a convention to use various regional factors. In this analysis, we include a variable of whether lives in an urban area and eight separate variables denoting residence in respective administrative divisions.
THE CAUSES OF FEMALE EMPLOYMENT STAGNATION
In the case of the labor market in Bangladesh in the past two or three decades, the most noticeable change has been the rising participation of women, with the rate rising from around 8% in the mid1980s to almost 36% in 2016/17. However, since 2010, there has not been much improvement in this rate and even a decline in 2013. In addition, in terms of quality of work, we observe almost no significant change, with almost a third of women still working as unpaid family workers and the majority of paid employees concentrated on the lower rungs of the occupational ladder.
In this research, we have attempted to utilize both supply and demand-side data to obtain insights into the recent changes in the labor market experience of women. Combining our microanalysis with an analysis of the macroeconomic environment of the country generates a number of plausible inherent explanations.
Recent studies reveal that the proportion of female employment in RMG is hovering around 65%. According to an interview, most of the RMG factories that were closed after the 2013 Lana Plaza event were relatively labor-intensive for women. In addition, the adoption of laborsaving machines for the types of work that were previously performed mainly by low-skilled female workers accelerated after the disaster, leading to female unemployment.
Second, from a macroeconomic point of view, empirical evidence suggests that the country is entering a period of unemployment growth and little progress in private investment (Raihan, 2018) 12. It was not a significant investment in a new industry. As a result, no significant alternative sectors (other than RMG) have been observed that could attract potential female entrants to the labor market.
Third, as explained in Section 5, recent technological advances/automation are affecting employment, with women with lower skills and education levels being more affected than men. However, it should be kept in mind that our analysis does not capture recent changes in the absence of recent nationally representative data on labor demand and automation.
Fourth, the supply analysis in Section 4 found that restrictions on women’s participation in the labor market (eg, the presence of infants, marriage status) have not changed in recent years. In addition, a close comparison of the 2010 supply side with the 2016/17 supply-side shows that the impact of key factors such as education on women’s labor force participation may be reversed, and the market labors education. Market results.
The recent increase in the concentration of economic and export activities, along with sluggish private sector investment, slowing RMG growth, and sluggish non-RMG export performance is the formal sector of women despite being educated. It is the cause of the stagnation of job creation. The overall level of education for women in Bangladesh has increased over the last decade, but due to a lack of employment opportunities, employment for women has not been secured. However, education has been found to play a powerful and positive role in non-agricultural and agricultural choices.
Gender norm-centric policies:
- Given the importance of the gender norm-centric domestic/care responsibilities of women, as reflected in our empirical analysis as well as in KIIs, an important policy intervention is the establishment of daycare facilities. The private sector has to take the lead, and it is in employers’ interests to do so. The government can provide support through tax rebates, cheap credit facilities, etc. to the private sector to set up daycare centers at the workplace. In addition, strategies like those of extending the provision of maternity and post-maternity leave and introducing flexible and part-time working hours and distance working schemes can be useful in this regard. Again, the private sector should take the lead in introducing innovative part-time and home working schemes targeted primarily at females. In the case of maternity leave, enforcing leave in the private sector should be a key focus area for the government.
- Early marriage and early pregnancy act as critical constraints to female labor market participation. In this regard, stricter and careful implementation of anti-child marriage laws is vital. The government has a direct role here, but non-governmental organizations can also contribute significantly through campaigns to change mindsets.
- Assuring a gender-friendly environment in education/training institutes (e.g. a separate bus service, toilet facilities, etc.) as well as at the workplace can be instrumental to the greater involvement of girls and young women in secondary and tertiary education. The private sector could take a leading role, with monetary incentives from the government; PPPs can also be useful strategies in this regard.
Skills development and education sector policies:
- With a view to providing women with the necessary skills, support at the initial stage of skills development (e.g. information centers at Upazila level, support desk in Upazila financial institutions)13 and further assistance at the stage of marketing of the products of self-employed women can be of significant importance. Initiatives from both the private and the public sectors and PPPs can be instrumental here.
- As reflected in the primary survey as well as in the KIIs, a low skills level is one of the primary reasons for women’s inferior position in the labor market. The issue is one not only of a lack of skills but also of a mismatch of skills offered by the traditional education system that is working against quality employment. To deal with the skills mismatch, one crucial issue is to align the curriculum with ‘actual’ market demand. In this context, a number of policies, like strengthening collaboration between vocational training institutes and industry (as in China and Thailand); involving industry representatives in designing the curriculum (India), and linking secondary education to TVET programmers to existing demand can be useful. The role of the private sector can be particularly important in this regard, as it can assist in modifying the curriculum, coordinate with education institutes in the placement of fresh graduates/trainees, etc.
- In the case of TVET institutes, demand assessment at the local level and linking local-level institutions to the specific demand for skills are critical, especially when it is about absorbing women, who have less mobility under the patriarchal social structure. Also, the lack of TVET institute performance data acts as a barrier to improving performance and the choices of prospective trainees. This situation can be improved by TVET institutes publishing annual statistics disaggregated by gender on job placement rates and starting salaries of those completing training. An online platform to collate these data and to make them available in an accessible way can be very useful. In this connection, both government and privately run training centers can take the responsibility for placing local youths in relevant jobs after the completion of training, with the help of local government bodies. In the absence of formal job centers, such entities can help in job searches and matching. Involving women in rural areas in non-farm activities, such as the food processing industry and storage and marketing of agro-based products can help in resolving rural unemployment and seasonal unemployment problems.
- As this research indicates, there is a need to strengthen the linkage between education and labor market participation for women, especially by encouraging women to participate in more relevant and technical education. There is also a need for coordination between primary and secondary and technical education providers.
Strategies to adapt to technological change and automation female unemployment and Policy Suggestions
- To spread the benefits of technological change and automation more equitably, in the short run different tax incentives and social protection can be useful. In the long term, there is a need to address the weakness in the investment climate so as to remove barriers to the creation of new and higher-productivity jobs with correspondingly higher wages in the sectors that can generate large-scale employment for women.
- In order to stimulate female labor market participation, a number of institutional reforms are needed. Effective coordination across the relevant ministries (Education, Primary and Mass Education, Youth and Sports, Women and Children Affairs, Expatriates’ Welfare and Overseas Employment, Finance) is critical for the timely and efficient implementation of support programmers to the private sector related to various interventions (daycare centers, low-cost accommodation, transport facilities, etc.)
Despite commendable progress in Bangladesh on a number of crucial socioeconomic indicators, there remains concerned over the position of women in the country`s labor market. In the mid1980s, the female labor force participation rate was only around 8%; this increased to around 35% in 2010but since then, from both a quantitative and a qualitative point of view, female employment has become somewhat stagnant. Using both supply and demand-side data, this report has examined the labor market status of women in recent times and has found empirical justification in support of this concern.
Based on trends in key labor market statistics for the past decade or so, our analysis has found that, with certain exceptions, not only have the (annual) change in the rate of participation and in the size of labor force slowed in recent years but also most women are trapped in unpaid or low-skill occupations. On the supply side, our estimation of the supply function using the latest data reveals that patriarchal gender form centric factors and domestic responsibilities act as a critical impediment to women`s engagement in the labor market.
The polarization of sectoral work that supports low-wage, low-productivity farm-based activities is in contrast to the structural changes that the economy is currently undergoing.
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