An Assignment On THE LABOR MARKET SCENARIO OF BANGLADESHSUBMITED TOMrs. Nigar NargisAssistant ProfessorDept. Of EconomicsUniversity 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 andcharts taking from Report on Labor Force Survey 2002-2003 which waspublished by Bangladesh Bureau of Statistics (BSS). As a result all the tables ofthis paper belong to secondary data.It is also mentioned that the labor force flow diagram used in this paper hasbeen taken from the book – Modern Labor Economics, Theory and PublicPolicy, by –Ronald G. Ehrenberg and Robart S. smith, published by AddisonWesley.
CONTENTS1. Introduction2. Report labour force survey3. Flowing diagram of labour force4. Labour force participation rate5. Labour force participation rate by age and sex6. Broad sector of employment7. Unemployment rate8. Conclusion
INTRODUCTION: Labour market is considered as one of the important macroeconomicmarkets and labour is the inevitable components of production. Its importance inbroad economical perspective of growth, stability and development cannot bedenied. In the context of Bangladesh its importance is several degree higher forits being densely population with considerable economically active generation.In this particular term paper we will try to make brief scenario of the labourmarket of Bangladesh during the period of 1995/96 to 2002/03 with the help ofLabour Force Survey (LFS) report conducted by Bangladesh Bureau of Statistics(BBS). The usual or conventional definition of labour force or economicallyactive population of the population aged 15 years and over has been used in theLFS 2002-03. According to the usual definition any person aged 15 years andover who was either employed or unemployed during the reference period andany person of the same age putting in a minimum of one hour’s work in familyfarm/enterprise for pay or profit during the reference period is consideredeconomically active. Only usual definition of economically active populationwould followed for the population of age 15 years and over to estimate the labourforce characteristics of Bangladesh. The purpose of the survey, like those of theearlier ones, is to estimate the size and composition of civilian labour force andits 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 inlabour force.LABOUR FORCE SURVEY 2002-2003: Year Labour survey(15+population) forcePopulation 1999-00 2001-Labour and others 1995-96 03Labour Male 30.7 32.2 36.0force(million) Female 5.4 8.5 10.3 total 36.1 40.7 46.3Employed Male 29.8 31.1 34.5population(million) Female 5.0 7.9 9.8 Total 34.8 39.0 44.3Unemployment Male 0.9 1.1 1.5population(million) Female 0.4 0.7 0.5 Total 1.3 1.8 2.0Not in labour Male 4.6 6.2 5.2force(million) Female 28.7 27.3 29.3 Total 33. 33.5 34.5Total population of 121.8 123.1 127.1Bangladesh From the dada it is observed that the population in Bangladesh has beenincreased from the period 1995/96 to 2001/03. Population was 121.8 million inthe labour force survey 1995/96. Bu8t by the next five years population increasedby 123.1(million) from 121.8(million)in the period 1999/00.And in the period2001/03 the population increased by 127.1(million) from 123.1(million). So, inthe 1st phase (1995/96-1999/00) population increased by only 1.3 million and inthe 2nd phase (1999/00 2001/03) population increased by 4 million. So we can seethat the total population of Bangladesh increased significantly during the period. We can also see that in the labour force survey 1995/96 total civilianlabour force was 36.1million that was 29.64% of the total population and in1990/00 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 was38.01%of the total population. We can also see that employed population of totallabour force was 96.4% in the period 1995-96. It was 95.8% of total labour forcein 1990/00 and 95.7%of the total labour force in 2001-03. And unemploymentpopulation was 3.6% of the total labour force in 1995/96, 4.2% of the total labourforce in 1999/00 and 4.3% of the total labour force in 2001-03. Figure: The flowdiagram of labour force survey (15+ populations). Table 1.b Usual definition: Labour force Year Labour Survey force (15+population)Population 2001-03Labour and others 1995-96 1999-00Labour Male 30.7 32.2 36.0force(million) Female 5.4 8.5 10.3 total 36.1 40.7 46.3 Table 1.b represents the data of labour force. Total labour force was 36.1million in the 1995-96. Male and female labour force was 30.7 and 5.4respectively in that period. Total labour force was 40.7 in the 1999-00 and hasbeen 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 forceis 8.5 and 10.3 respectively. Now it can be concluded that the labour forcethroughout 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 forceincreasing at a increasing rate. The trends of the labour force are belowrepresented graphically-
Trend of labour force force(million) 60 Labour 40 20 male 0 female 1 2 3 total 1995-96 1999-00 2001-03 YearLabour force participation rate: Labour force participation rate could be defined as the proportion ofthe civilian population aged 15 years and over who are in the labour force. Thatis-Labour force participation rate = (Labour force/Population) x 100Here labour force = Employed Persons (EP) + Unemployed Persons (UP)Now I will show the LFPR by gender over time in the following data during theperiod of 1995-96, 1999-00 and 2001-03. Year survey(15+population) Labor forceLFPR 1999-00 2001-03 1995-96 Male 87.0 84.0 87.4LFPR Female 15.8 23.9 26.1 total 52.0 54.9 57.3Source: 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 the1990 / 2000 and 2001/03 total labour force participation rate increased 54.9 and57.3 respectively. Now it can be concluded that throughout the whole periodlabour force participation rate increased as it was 52.0 in the 1995/96 and 54.9inthe 1999/00 and 57.3 in the 2001/03.In the first phase participation rate increasedby 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 periodbut male participation rate decline in the first phase by 3.0. In this period femaleparticipation rate increased by 8.1.In the second phase both male and femaleparticipation rate increased by 3.4 and 2.2 respectively. Trend of labour force participation rate 100 50 Male 0 Female 1 2 3 Total 1995/96 1999/00 2001/03Labor force participation rate by age and sex: Labour force participation rate by age and sex has been presented intable 3.1.a It is found that at national level, the highest participation rate wasobserved 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 group65 years and over because in the higher age group people naturally becomephysically unable to participate in economic activities for their old agecomplications.Table 3.1.a: Labour force participation rate by age group and sex :Age group Labour force Participation rates (%) Both sexes male FemaleTotal 57.3 87.4 26.115-19 49.7 58.9 38.220-24 53.8 84.9 26.725-29 58.4 97.7 27.530-34 62.1 99.7 27.2
35-39 64.6 99.8 28.140-44 65.9 99.7 25.645-49 64.6 99.5 22.650-54 62.8 99.2 19.955-59 61.0 97.3 17.260-64 52.6 87.8 13.465+ 40.3 66.1 8.7 Sex differential in participation rate by age is pronounced. For the males, thehighest participation rate (99.8%) was observed for age group 35-39 whereas forthe 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% to58.9% compared to 38.2% to 8.7 % for females. It is interesting to note that, formales the participation rate increases sharply from age 15-19 and reaches smaximum 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 formarriage and other reasons.
120 100 80 Both sexes 60 Male 40 Female 20 0 15-19 25-29 35-39 45-49 55-59 65+Broad sector of employment: Employed persons by broad sectors of employment have been presentedin table 4.1. It is observed from the table that among the employed persons ofboth sexes, 51.7 percent mere engaged in agriculture sector and 48.3 percent innon-agriculture sector. In the non-agriculture sector out of 48.3f percent as highas 34.6 percent were engaged in service sector and the rest 13.7 percent wereengaged in industry sector.Table: Employed person 15 years and over by gender broad economic sectors:Broad Both sexes Male Femaleeconomic sector Percent (%) Percent (%) Percent (%)Total 100.0 100.0 100.0Agriculture 51.7 49.8 58.6Non agriculture 48.3 50.2 41.4Industry 13.7 12.3 18.4Among the males, 49.8 percent were employed in agriculture sector and 50.2percent in non-agriculture sector. Of those employed in non-agriculture sector, ashigh as 37.9 percent were employed in service sector and the rest 12.3 percentwere engaged in industry sector. On the other hands, among the females 58.6percent were in agriculture sector and 41.4 percent were in non-agriculture sectorof which services sector employed 23.0 percent and industry sector 18.4 percent.
60 50 40 30 Series1 20 10 0 Agriculture Industry Services . Employment in broad sectors (%)Unemployment rate: Unemployment is perhaps the worst scrounge of a modern economy. Theunemployment rate is defined the proportion of the labour force that isunemployed. The unemployment rate expresses the total labour time lost due tounemployment as a proportion of total labour time of the entire labour force.Here the data of unemployment rate –Table :Usual definition: unemployment rate % Year Survey Labour force (15+population)Unemployment rate 1995-96 1999-00 2001-03 Male 2.8 3.4 4.2 Female 7.8 7.8 4.9 total 3.5 4.3 4.3Source: Report LFS-2002-03, BBS Table represents the data of unemployment rate. Total unemployment rate was3.5 in the LFS 1995/96. Male and female unemployment rate was 2.8 and 7.8respectively. In the LFS 1999/00 total unemployment rate increased to 4.3 and
male unemployment rate also increased to 3.4.But female unemploymentunchanged 7.8. Total unemployment rate unchanged 4.3 and maleunemployment 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) unemploymentrate unchanged. Here the trend of unemployment represented graphically. Trends of unemployment rate Unemployment 10 rate 5 Male 0 Female 1 2 3 Total 1995/96 1999/00 2001/03Conclusion: From the above discussion finally we can say that we get a clear and exactidea about the labour market scenario of Bangladesh during the period 1995/96,1999/00 and 2001/03. Although employment rate increasing more thanunemployment rate all through the years but interestingly underemployment rateis increasing. Even considering the contribution of Labour Force in broadeconomic sector we see that its contribution is increasing in agriculture but it hasno sufficient contribution to industrial and service sector which economicallyleads to inefficient allocation of natural resources.