Employment and the Labor Market in Bangladesh: Overview of Trends and Challenges

Abstract

Key Messages: Manufacturing needs to grow faster as that sector has the potential to be the engine of growth and a major source of productive employment. More labor-intensive sectors such as garments will have to continue to grow. The policy regime needs to be neutral for other industries with the same growth potential. The gap in earnings between education levels is narrowing with the exception of secondary education. This general trend is positive in the sense that education does not seem to contribute to income inequality. In addition, greater access to education can help women find better jobs, while their prominence in garment- sector work helps reduce poverty. For quality of employment to improve, real wages should rise in tandem with increasing labor productivity. Other elements of the work environment and safety also must improve. If the experience of the garment industry is any indicator, minimum wages and improvements in workplace safety do not seem to reduce employment opportunities.