An Assignment

On

THE LABOR MARKET SCENARIO OF BANGLADESH

SUBMITED TO

Mrs. Nigar Nargis

Assistant Professor

Dept. Of Economics

University Of Dhaka

SUBMITTED BY

Md.Shafiqul Alam

Roll No:060

3rd

Year Hon`s

Session: 2004-2005

Dept. Of Economics

University Of Dhaka

Date of Submission: 3rd April 2006

Acknowledgement

This assignment has been prepared with the help of the data, graphs and

charts taking from Report on Labor Force Survey 2002-2003 which was

published by Bangladesh Bureau of Statistics (BSS). As a result all the tables of

this paper belong to secondary data.

It is also mentioned that the labor force flow diagram used in this paper has

been taken from the book – Modern Labor Economics, Theory and Public

Policy, by –Ronald G. Ehrenberg and Robart S. smith, published by Addison

Wesley.

CONTENTS

1. Introduction

2. Report labour force survey

3. Flowing diagram of labour force

4. Labour force participation rate

5. Labour force participation rate by age and sex

6. Broad sector of employment

7. Unemployment rate

8. Conclusion

INTRODUCTION:

Labour market is considered as one of the important 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

its being densely population with considerable economically active generation.

In this particular term paper we will try to make brief scenario of the labour

market of Bangladesh during the period of 1995/96 to 2002/03 with the help of

Labour Force Survey (LFS) report conducted by Bangladesh Bureau of Statistics

(BBS).

The usual or conventional definition of labour force or economically

active population of the population aged 15 years and over has been used in the

LFS 2002-03. According to the usual definition any person aged 15 years and

over who was either employed or unemployed during the reference period and

any person of the same age putting in a minimum of one hour’s work in family

farm/enterprise for pay or profit during the reference period is considered

economically active. Only usual definition of economically active population

would followed for the population of age 15 years and over to estimate the labour

force characteristics of Bangladesh. The purpose of the survey, like those of the

earlier ones, is to estimate the size and composition of civilian labour force and

its characteristics such as age and genders specific labour force participation rate,

status in employment, unemployment and duration of unemployment etc.

Report labour force survey:

Table 1.a:

Usual definition, population, labour force, employed, unemployed not in

labour force.

LABOUR FORCE SURVEY 2002-2003:

Year

Population

Labour and others

Labour

force

1995-96

survey(15+population)

1999-00

2001-

03

Labour

force(million)

Male

Female

total

30.7

5.4

36.1

32.2

8.5

40.7

36.0

10.3

46.3

Employed

population(million)

Male

Female

Total

29.8

5.0

34.8

31.1

7.9

39.0

34.5

9.8

44.3

Unemployment

population(million)

Male

Female

Total

0.9

0.4

1.3

1.1

0.7

1.8

1.5

0.5

2.0

Not in labour

force(million)

Male

Female

Total

4.6

28.7

33.

6.2

27.3

33.5

5.2

29.3

34.5

Total population of

Bangladesh

121.8 123.1 127.1

From the dada it is observed that the population in Bangladesh has been

increased from the period 1995/96 to 2001/03. Population was 121.8 million in

the labour force survey 1995/96. Bu8t by the next five years population increased

by 123.1(million) from 121.8(million)in the period 1999/00.And in the period

2001/03 the population increased by 127.1(million) from 123.1(million). So, in

the 1st phase (1995/96-1999/00) population increased by only 1.3 million and in

the 2nd

phase (1999/00 2001/03) population increased by 4 million. So we can see

that the total population of Bangladesh increased significantly during the period.

We can also see that in the labour force survey 1995/96 total civilian

labour force was 36.1million that was 29.64% of the total population and in

1990/00 total civilian labour force was 407 million that was 33.42%of the total

population. And in 2001-03 total civilian labour force was 46.3 million that was

38.01%of the total population. We can also see that employed population of total

labour force was 96.4% in the period 1995-96. It was 95.8% of total labour force

in 1990/00 and 95.7%of the total labour force in 2001-03. And unemployment

population was 3.6% of the total labour force in 1995/96, 4.2% of the total labour

force in 1999/00 and 4.3% of the total labour force in 2001-03. Figure: The flow

diagram of labour force survey (15+ populations).

Table 1.b

Usual definition: Labour force

Year

Population

Labour and others

Labour

force

1995-96

Survey

(15+population)

1999-00

2001-03

Labour

force(million)

Male

Female

total

30.7

5.4

36.1

32.2

8.5

40.7

36.0

10.3

46.3

Table 1.b represents the data of labour force. Total labour force was 36.1

million in the 1995-96. Male and female labour force was 30.7 and 5.4

respectively in that period. Total labour force was 40.7 in the 1999-00 and has

been 46.3 in the 2001-03. It is continuously increasing from 1995-96 to 2001-03.

In 1999-00 and 2001-03 male labour force is 32.2 and 36 and female labour force

is 8.5 and 10.3 respectively. Now it can be concluded that the labour force

throughout the whole period increased. In the first phase (1995/96 – 1999/00)

total labour force increased by4.6 million and in the second phase (1999/00-

2001/03) total labour force increased by 5.6 million. Here the labour force

increasing at a increasing rate. The trends of the labour force are below

represented graphically-

Trend of labour force

0

20

40

60

1 2 3

1995-96 1999-00 2001-03

YearL

ab

ou

r

forc

e(m

illi

on

)

male

female

total

Labour force participation rate:

Labour force participation rate could be defined as the proportion of

the civilian population aged 15 years and over who are in the labour force. That

is-

Labour force participation rate = (Labour force/Population) x 100

Here labour force = Employed Persons (EP) + Unemployed Persons (UP)

Now I will show the LFPR by gender over time in the following data during the

period of 1995-96, 1999-00 and 2001-03.

Year

LFPR

Labor force

1995-96

survey(15+population)

1999-00

2001-03

LFPR

Male

Female

total

87.0

15.8

52.0

84.0

23.9

54.9

87.4

26.1

57.3

Source: Report labour force survey 2002-03

From the table we can see that labour force participation rate in the1995-

96 was 52.0. Male participation rate was 87.0 and the female was 15.8. In the

1990 / 2000 and 2001/03 total labour force participation rate increased 54.9 and

57.3 respectively. Now it can be concluded that throughout the whole period

labour force participation rate increased as it was 52.0 in the 1995/96 and 54.9in

the 1999/00 and 57.3 in the 2001/03.In the first phase participation rate increased

by 2.9 and in the second phase increased by 2.4. On the other hand both of male

and female labour force participation rates also increased throughout the period

but male participation rate decline in the first phase by 3.0. In this period female

participation rate increased by 8.1.In the second phase both male and female

participation rate increased by 3.4 and 2.2 respectively.

Trend of labour force

participation rate

0

50

100

1 2 3

1995/96 1999/00 2001/03

Male

Female

Total

Labor force participation rate by age and sex:

Labour force participation rate by age and sex has been presented in

table 3.1.a It is found that at national level, the highest participation rate was

observed in age group 40-44(65.9%), followed by age groups 45-49 and 35-39(

64.6%). On the other hand, the lowest participation rate was found for age group

65 years and over because in the higher age group people naturally become

physically unable to participate in economic activities for their old age

complications.

Table 3.1.a: Labour force participation rate by age group and sex :

Age group Labour force Participation rates

(%)

Both sexes male Female

Total

15-19

20-24

25-29

30-34

57.3

49.7

53.8

58.4

62.1

87.4

58.9

84.9

97.7

99.7

26.1

38.2

26.7

27.5

27.2

35-39

40-44

45-49

50-54

55-59

60-64

65+

64.6

65.9

64.6

62.8

61.0

52.6

40.3

99.8

99.7

99.5

99.2

97.3

87.8

66.1

28.1

25.6

22.6

19.9

17.2

13.4

8.7

Sex differential in participation rate by age is pronounced. For the males, the

highest participation rate (99.8%) was observed for age group 35-39 whereas for

the females the highest participation rate (38.2%) was observed for age group 15-

19. It may be mentioned that the participation rate for male ranges from 99.8% to

58.9% compared to 38.2% to 8.7 % for females. It is interesting to note that, for

males the participation rate increases sharply from age 15-19 and reaches s

maximum in the age group 35-39.however , for females it reaches at the top

(38.2%) in the age group 15-19(mostly unmarried) gradually decreases for

marriage and other reasons.

0

20

40

60

80

100

120

15-19 25-29 35-39 45-49 55-59 65+

Both sexes

Male

Female

Broad sector of employment:

Employed persons by broad sectors of employment have been presented

in table 4.1. It is observed from the table that among the employed persons of

both sexes, 51.7 percent mere engaged in agriculture sector and 48.3 percent in

non-agriculture sector. In the non-agriculture sector out of 48.3f percent as high

as 34.6 percent were engaged in service sector and the rest 13.7 percent were

engaged in industry sector.

Table: Employed person 15 years and over by gender broad economic sectors:

Broad

economic sector

Both sexes

Percent (%)

Male

Percent (%)

Female

Percent (%)

Total 100.0 100.0 100.0

Agriculture 51.7 49.8 58.6

Non agriculture 48.3 50.2 41.4

Industry 13.7 12.3 18.4

Among the males, 49.8 percent were employed in agriculture sector and 50.2

percent in non-agriculture sector. Of those employed in non-agriculture sector, as

high as 37.9 percent were employed in service sector and the rest 12.3 percent

were engaged in industry sector. On the other hands, among the females 58.6

percent were in agriculture sector and 41.4 percent were in non-agriculture sector

of which services sector employed 23.0 percent and industry sector 18.4 percent.

.

0

10

20

30

40

50

60

Agriculture Industry Services

Series1

Employment in broad sectors (%)

Unemployment rate:

Unemployment is perhaps the worst scrounge of a modern economy. The

unemployment rate is defined the proportion of the labour force that is

unemployed. The unemployment rate expresses the total labour time lost due to

unemployment as a proportion of total labour time of the entire labour force.

Here the data of unemployment rate –

Table :

Usual definition: unemployment rate %

Year

Unemployment rate

Labour force

1995-96

Survey

(15+population)

1999-00

2001-03

Male

Female

total

2.8

7.8

3.5

3.4

7.8

4.3

4.2

4.9

4.3

Source: Report LFS-2002-03, BBS

Table represents the data of unemployment rate. Total unemployment rate was

3.5 in the LFS 1995/96. Male and female unemployment rate was 2.8 and 7.8

respectively. In the LFS 1999/00 total unemployment rate increased to 4.3 and

male unemployment rate also increased to 3.4.But female unemployment

unchanged 7.8. Total unemployment rate unchanged 4.3 and male

unemployment increased to 4.2 and female unemployment decline 2.8to 4.9.

Now it can be concluded that unemployment rate increased in the first phase

(1995/96- 1999/00) but in the second phase (1999/00 to 2000/03) unemployment

rate unchanged. Here the trend of unemployment represented graphically.

Trends of unemployment rate

0

5

10

1 2 3

1995/96 1999/00

2001/03

Un

em

plo

ym

en

t

rate

Male

Female

Total

Conclusion:

From the above discussion finally we can say that we get a clear and exact

idea about the labour market scenario of Bangladesh during the period 1995/96,

1999/00 and 2001/03. Although employment rate increasing more than

unemployment rate all through the years but interestingly underemployment rate

is increasing. Even considering the contribution of Labour Force in broad

economic sector we see that its contribution is increasing in agriculture but it has

no sufficient contribution to industrial and service sector which economically

leads to inefficient allocation of natural resources.