Non-farm sectors drive job growth
Some 40 lakh new faces entered the job market between 2010 and 2013 and an equal number of people got jobs thanks to increasing economic activities in non-farm sectors, according to the Labour Force Survey 2013.
At the end of 2013, the total labour force stood at 6.07 crore, up from 5.67 crore recorded three years ago, Bangladesh Bureau of Statistics found in the survey.
Of them, 5.81 crore were gainfully employed in contrast to 5.41 crore in 2010.
It means 13.33 lakh people entered the market every year during the period under study and an equal number of people got gainfully employed then.
Subsequently, the number of absolutely jobless persons remained unchanged at 26 lakh in 2013, according to the survey.
The unemployment rate fell to 4.3 percent in 2013 from 4.5 percent in 2010.
“It shows the economy is moving in the right direction as far as employment creation is concerned,” said Zaid Bakht, research director of BIDS.
He, however, expressed doubt about the unemployment rate, which, he said, is measured following an International Labour Organisation definition that treats a person employed if the person was engaged in any income-generating activity for even one hour in the previous week.
For this reason, the unemployment rate is grossly underestimated, he said, adding that it shows Bangladesh's unemployment rate is below the US's.
“But as we are following the definition for a long time now, a decline indicates improvement in the job market -- it is a positive indication.”
Meanwhile, the latest findings of BBS show that a fewer number of people entered the labour market between 2010 and 2013 than between 2005-06 and 2010: then, some 72 lakh people signed up and 67 lakh got jobs in various sectors of the economy.
Rushidan Islam Rahman, research director of Bangladesh Institute of Development Studies, said it is due to a decline in supply as a result of continuation of schooling at secondary level and postponement of labour force entry, captured in the lower labour force participation rate.
The labour force participation rate stood at 57.1 percent in 2013 against 59.3 percent in 2010.
Another factor is the slower rate of job creation, which, in turn, is due to the growth of less labour intensive sectors, she said. Labour force growth in agriculture has gone through a decline, as expected in the process of modern sector-led growth.
This is also linked to the growth of more educated youth labour force that prefers non-farm jobs, added Rahman.
Bakht said the service sector played a vital role in job creation.
“But the industrial sector has to take the lead if we are to tackle joblessness in a bigger way. So, it is important to bring vigour in investment from its present sluggishness to make a dent on unemployment.”
Between 2010 and 2013, the non-agriculture sectors such industry, trade and other services absorbed a higher number of people than the farming sector.
As a result, the proportion of jobs in the agriculture sector, which was the main provider of employment before, declined to 45.1 percent in 2013, from 47.3 percent recorded three years back.
“It is a welcoming sign,” said Ahsan H Mansur, executive director of Policy Research Institute, adding that it would have been even better had the contribution of agriculture declined in absolute terms.
However, the rate of entry of women into the labour force slowed down during the period.
Only 10 lakh women entered the job market, down from 51 lakh between 2005-06 and 2010.
Of the female entrants, six lakh got jobs. The rest are unemployed, with the rate of female unemployment rising to 7.2 percent in 2013 from 5.8 percent three years back.
Women's participation rate in labour force also declined.
“That's bad news. It means we could not create enough jobs for women. They account for half of the population. If their participation declines, the economy will be deprived of their contribution,” he said, while stressing the need for accelerating investment and economic growth for creation of more jobs.