The Demographic Dividend
Development and population are complex concepts that require more sophisticated models to study them. They affect each other in different ways and the relationship between the two often changes over time. As Bangladesh transitions from a lower income country to a middle income country, it is important to understand some of the social variables that are at work. A demographic transition model (from Hayes and Jones, 2015) helps breakdown the complex interactions between these two variables.
the primary concern is … how to make sure that the large numbers of youth will be able to successfully move into the workforce
The model suggests that countries move between two states, one where birth and death rates are high and one where birth and death rates are low, which results in a low rate of population growth in both cases. Countries moving between these two stable states are considered to be in volatile transition and experience high positive or negative population growth. The most important characteristic is that the result of this kind of transition leaves these countries with low elderly and child populations, and high youth and young adult populations, a situation of low dependencies and high numbers of workers. Therefore, the primary concern is how to successfully pass through these transition periods without experiencing large declines in the average level of living and how to make sure that the large numbers of youth will be able to successfully move into the workforce.
Bangladesh’s current situation
As Bangladesh transitions towards a stable state of low birth and death rates, population growth and therefore development move in to states of relative flux. Per capita GDP is changing rapidly, from USD 1,033 in 2013 to USD 1466 in 2016. Incomes are also rising rapidly, however much of the country lives on under USD 2 a day.
Bangladesh is also faced with a unique window of opportunity, where the workforce will increase dramatically over the next 10-20 years
Much of the population still lives outside of urban centers, and agriculture is still one of the largest employers in the country, however the productivity of agriculture remains relatively low. Conversely, other sectors of the economy have helped push Bangladesh towards 7% GDP growth a year. New opportunities in garments, manufacturing, and services are changing the economy.
Bangladesh is also faced with a unique window of opportunity, where the workforce will increase dramatically over the next 10-20 years, and where the country will have to be able to develop the human and capital capacities to successfully transition youth to the workplace. Bangladesh is a country in transition, where population, development, economic, and labour variables are changing rapidly. The goal therefore is to understand how Bangladesh will be able to maneuver this transition successfully.
Youth and the labour market
One of the largest concerns for Bangladesh is how to include the growing number of youth into this growing economy. Can current sectors give new workers employment, or are they already oversaturated? What is the experience of new workers trying to find work? To begin answering these questions, this post series will examine the transition of youth from school to work. Transitioning from school to work provides a solid foundation to begin studying a wider range of issues in the labour market, especially related to issues of oversaturated industries and shrinking employment opportunities, and it also reveals some of the structural weaknesses of an economy under the strain of rapid population growth. Truly, how Bangladesh handles the introduction of millions of youth into their workforce will determine the future success of the country. In order to begin this discussion, this post will focus on the current state of youth, how successfully they are transitioning from school to work, what sorts of conditions they are working in, and what challenges they face going forward.
Level of educational attainment
Youth in Bangladesh enjoy more opportunities than their predecessors, but there are also constraints on the ability to stay in school, the availability of good work, the productivity of sectors that traditionally employ youth, social constraints on women, and the success rate of successfully transitioning into the workforce. School attendance has been rising steadily, meaning that more people are entering primary school, and more children are able to successfully complete primary school.
However, there are other worrying trends, such as the large number of youth who drop out of secondary school (34.7% of males and 35.4% of females who attended secondary school) and high tertiary level drop-out rates (36.4% of males and 34.2% of females who attended tertiary schools). These dropout rates are likely the result of economic insecurity in families, requiring youth to find employment starting as early as 14 or 15 years of age, and the large number of females who drop out early. Regardless, they are concerning trends, and should be the focus of more considerable attention.
Including all tiers of education, 64.4% of youth dropped out at their current level, where females end up leaving school earlier and more frequently then males, often because of marriage and other familial responsibilities. More specifically, 71.0% of female youth who left school cited responsibility to family and household as the main criteria that they left. Other data suggests that families facing poverty will pull children out of school to help with income generation as most of the country still lives under USD 2 a day (77% as the BBS records it). These socioeconomic stresses are keeping youth out of school and forcing them into the workforce early, often before they’re legally allowed to be.
Youth are finding work, but the work is often informal and is not good enough. The official youth unemployment rate sits at 10.3%, however the rate of unemployment amongst young females is almost four times higher than that of young males (22.9% to 6.2%). This is not exceptionally high by regional standards, however Bangladesh does have higher than average rate of underemployment and underutilization amongst youth.
Underemployment and underutilisation
The gender divide draws the most immediate attention, as unemployment among females was almost four times higher than males, and almost two-thirds of female youth were inactive non-students compared to less than 10 percent of male youth. There is also an unusual relationship between education level attained and unemployment, where 26.1% of educated individuals had trouble finding work, compared to 6.0% of individuals with only primary level education. This is a particularly strange anomaly, considering the logic that more education should bring more opportunities. It is possible that the economy is still slowly making the transition to a more advanced economy, that it is lagging. Ultimately, there is a need for more in depth research. Conversely, youth workers don’t feel prepared for the work their asked to do, as 61.6% of youth felt undereducated for their job, mostly in agriculture, fishing, and craft trades. It is difficult to tell whether the onus to learn technical and workplace skills lies on the worker, or whether employers are willing to offer services to further train and develop their workforce.
So there are youth who are working, but the quality of employment is often low. From a survey of youth , only 37.9% were currently working. Of those who were working, 31.7% were own account workers, and therefore vulnerable to severe economic insecurity, and 11.1% were unpaid family workers. These degrees of employment coincide with national totals, where only 5.1% of employed youth found stable employment, and where 95.1% of all youth workers were involved in informal employment in some way. It seems that while some youth are working in relatively formal sectors, many youth are either working in informal jobs on the side or are generating their only income from informal employment. Even though the national unemployment rates are low, the high levels of underemployment lead youth to find second or third jobs in the informal sector, where regulation and safety is the most absent.
Employment by sector
A breakdown of youth employment by sector reveals differences in employability and in the potential future trends for employment rates among male and female youth. Even though agriculture remains the largest employer of youth, keeping youth in rural areas, services such as restaurants, hotels, and other commercial businesses, and industry such as garment manufacturing, textiles, and leathers are increasingly attracting youth, especially from those more rural areas, causing other issues as a result of internal migration and urbanization.
Many gendered issues persist across all sectors, as young working females face many inequalities compared with young males. Of all female youth, 14.9% were working (compared to 64.3% of male youth) and the female unemployment rate was 22.9% (compared to 6.2% of male youth). Most young females remained outside of the labour force (80.7%), where only a small percentage of which was due to being enrolled in school. Young females face larger challenges when trying to enter work, especially if they have not completed secondary school. This is why opportunities in the garment industry have been very appealing from both an employment standpoint, but also a gender empowerment perspective. Increased employment, and therefore higher amounts of independent financial security can increase the standing of female youth.
Quality of work
Even those who find work aren’t guaranteed good work. Almost two-thirds (59.5%) worked ‘excessive hours,’ totaling more than 48 hours per week. The Bangladesh Bureau of Statistics Labour Force Survey from 2010 reveals that only 10.1% of all jobs were considered decent, while good jobs and good enough jobs constituted 36.4% and 53.3% of total wage employed jobs, respectively. So while many working youth who have either left school or received varying degrees of education are able to find work, the work is often not very stable, and is frequently under-utilizing youth productivity. Many youth hope for ‘decent’ jobs, where they can support their family from a stable (in terms of hours, conditions) and secure (in terms of job security) position.
Opportunity to obtain better work
While educated workers tend to face a higher unemployment rate (26.1% vs 6.0% unemployment amongst primary level educated workers), they are also one and a half times more likely to find a stable and tend to earn at least three times as much. Education and training has a large impact on moving from good-enough jobs to good jobs and decent jobs, but it does not seem to affect the rate at which youth initially find jobs.
There are concerns over whether or not the growing Ready Made Garment industry will be able to absorb the growing youth population,
Primary education was found to be insignificant in changing the quality of job, whereas secondary and higher secondary education have almost a 20% higher chance to be in a decent job compared to someone with no education. The impact of level of educational attainment was highest with university graduates. A university degree increased the chance to find a good job by 23% and the chance of getting a decent job by 26% within the first couple of years of job searching.
Household education also has large trans-generational impacts if the education attainment is higher than primary school, so children also feel the effects of greater educational attainment. This is all to suggest that while educational attainment is not initially profitable, considering high costs and low initial employment rate, the benefits in the long term far outweigh the costs.
Youth are already faces the stresses of a labour market that is struggling to incorporate them into the workforce. While they find work, youth tend to be underpaid, given irregular or long work hours, given dangerous work, and are susceptible to unfair working agreements. The ability to find better work is also difficult, as many youth are unable to finish schooling due to family responsibilities or marriage.
As it stands, this is a prelude of things to come. There are concerns over whether or not the growing Ready Made Garment industry will be able to absorb the growing youth population, and whether traditional sectors such as agriculture will be able to provide a livelihood for young adults. What are youth missing to more successfully transition to work? What is the best way to provide such a service? Next post we explore employers, and how they are managing larger influxes of workers, and what they are doing to successfully transition youth into employees.
 Hayes, G. and Jones, G. “The Impact of the Demographic Transition on Socioeconomic Development in Bangladesh: Future prospects and Implications for Public Policy” The United Nations Population Fund (January 2015): 1, 35.
 Hayes and Jones (2015), 2, 35.
 Danish Trade Union Council for International Development Cooperation. “Bangladesh: Labour Market Profile” (2014): 16-17; Bangladesh Bureau of Statistics. “Labour Force Survey 2013” (2015).
 Bangladesh Bureau of Statistics. “Labour Force Survey 2010” (2012).
 Toufique, Kazi Ali. “Labour market transitions of young women and men in Bangladesh” International Labour Office: Work4Youth 13 (June 2014): 11.
 Toufique (2014), 29.
 Raihan, S. and Uddin, M. “Do education and skill development affect the transition from ‘good-enough job’ to ‘decent job’?” SANEM 2, 7 (December 2015): 1.
 Toufique (2014), 7.
 Toufique (2014), 3.