Factors Affecting Labor Force Participation Decision in Bangladesh: An Empirical Study Using Microdata

Abstract

Labor force participation rate is often used to keep an eye on the progress in the labor market. Using the labor force survey-2016, this study tries to identify the socioeconomic factors affecting a person’s decision to join the labor force. A probit model has been used to understand the significance and respective marginal effects of each of the factors. The study has found higher chances of joining the labor force among the rural population. Attainment of higher education and training facilities can play vital roles in labor force participation decisions. The presence of elderly members and a high dependency ratio decreases the probability of participating in the labor force. Based on the findings, this study argues that prompt comprehensive actions are needed to reap off the benefit of demographic dividend.