{"title":"Dimensions of Informality in Bangladesh Labour Market and the Consequent Wage Penalty","authors":"Mustafiz Rahman, D. Bhattacharya, Md. Al-Hasan","doi":"10.1177/1391561419850303","DOIUrl":null,"url":null,"abstract":"The article examines the various dimensions and underlying causes of informal employment in the Bangladesh labour market and the associated wage penalty. Based on labour force survey data for successive points, we trace the dynamics of employment in Bangladesh along the informal–formal divide over time. Given that wage differential remains a key feature concerning the two market segments, we have carried out mean and quantile decomposition exercises to estimate the wage penalty originating from informality. We find significant wage gaps between formal- and informal-paid employees, formal paid and informal day labour, and formal paid and informal self-employed. The wage gaps range between 65.0 per cent and 225.0 per cent. The gap arises from a combination of observed differences in human capital and job characteristics, and the wage premium accruing from formal employment. JEL: C21, J31","PeriodicalId":39966,"journal":{"name":"South Asia Economic Journal","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2019-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"5","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"South Asia Economic Journal","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1177/1391561419850303","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 5
Abstract
The article examines the various dimensions and underlying causes of informal employment in the Bangladesh labour market and the associated wage penalty. Based on labour force survey data for successive points, we trace the dynamics of employment in Bangladesh along the informal–formal divide over time. Given that wage differential remains a key feature concerning the two market segments, we have carried out mean and quantile decomposition exercises to estimate the wage penalty originating from informality. We find significant wage gaps between formal- and informal-paid employees, formal paid and informal day labour, and formal paid and informal self-employed. The wage gaps range between 65.0 per cent and 225.0 per cent. The gap arises from a combination of observed differences in human capital and job characteristics, and the wage premium accruing from formal employment. JEL: C21, J31
期刊介绍：
The South Asian nations have progressively liberalized their economies in recent years in an effort to integrate with the world economy. They have also taken steps to enhance multilateral and regional economic integration. Even though the South Asian economies have grown at an average rate of more than 5 per cent over the last few years, roughly 40 per cent of their people still live below the poverty line. Hence, the South Asian region continues to face many challenges of economic and social development. The South Asia Economic Journal (SAEJ) is designed as a forum for informed debate on these issues, which are of vital importance to the people of the region who comprise one-sixth of the world’s population. The peer-reviewed journal is devoted to economic analysis and policy options aimed at promoting cooperation among the countries comprising South Asia. It also discusses South Asia’s position on global economic issues, its relations with other regional groupings and its response to global developments. We also welcome contributions to inter-disciplinary analysis on South Asia. As a refereed journal, SAEJ carries articles by scholars, economic commentators,policy-makers and officials, from both the private and public sectors. Our aim is to create a vibrant research space to explore the multidimensional economic issues of concern to scholars working on South Asia. Among the issues debated in relation to South Asia are: - the implications of global economic trends; - the issues and challenges by WTO; - approaches to industrialization and development; - the role of regional institutions such as the SAARC; - the relationship between SAARC and other regional economic groupings such as ASEAN; - the implications of economic liberalization for trade and investment in the region; - new initiatives that can be launched to enhance economic cooperation among the South Asian countries both on a bilateral and a regional basis.
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