Women in Bangladesh Labour Market Determinants of Participation, Gender Wage Gap and Returns to Schooling

Abstract

This paper examines four issues concerning the labour market scenario in Bangladesh, from the particular perspective of female labour force participation: (a) trends and characteristics of female participation; (b) determinants of female labour force participation; (c) male–female wage gap and wage discrimination; and (d) returns to schooling for women. Mean wage decomposition analysis carried out by the authors shows that, on average, woman earns 12.2 per cent less than man, with about half the gap explained by labour market discrimination. Quantile counterfactual decomposition shows that women are subject to higher wage penalty at the lower deciles of the wage distribution. The paper finds that women’s returns to schooling tends to be underestimated, but average returns for female is found to be higher than that of male. The report recommends several strategies, based on findings of econometric analyses, to incentivise formalisation of female labour, reduce the wage gap and occupational segregation in the labour market and promote skill-endowed education for women in view of emerging labour market challenges in Bangladesh.