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

Publication | August 2016
Employment and the Labor Market in Bangladesh: Overview of Trends and Challenges

Bangladesh can reap the rewards of a so-called demographic dividend, provided that people of working age can be converted to human capital and utilized in a productive manner.

Although economic growth in Bangladesh has been satisfactory, employment performance has been less so—even taking into account the substantial jobs generated in the export-oriented, ready-made garment industry. In addition, the employment challenge is about the transfer of workers from low- to higher productivity sectors, not just about the sheer number of jobs.

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.

This brief is a co-publication of the Asian Development Bank and the International Labour Organization, Regional Office for Labour and the Pacific.