Occupational shift plays key role

FE Team | Published: September 08, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
Bangladesh's overall growth has been biased to the poorest of the poor because of higher per capita expenditure by the extreme poor than by the moderate poor and the non-poor population, a World Bank (WB) report said.
A gradual occupational shift from the agriculture to the non-agriculture sector appears to have played a vital role in the improvement in per capita expenditure, the WB report titled, "Has Growth Been Pro-poorest In Bangladesh? Evidence Between 2000 and 2005" observed.
The report showed that when about half of the households in the bottom three deciles depended on agriculture as their main occupation in Bangladesh in calendar 2000, the number declined to around 43 per cent in 2005.
The World Bank report said that during 2000 and 2005, the national poverty headcount rate dropped from 48.9 per cent to 40 per cent. It was more remarkable that during that time the extreme poverty rate dropped from 34.3 per cent to 25.1 per cent.
About the employment patterns, the report said proportion of household heads with agriculture day labour as their main occupation declined from 35.8 per cent in 2000 to 33 per cent in 2005 for the bottom three expenditure deciles. Correspondingly, the non-agriculture day labour group showed an increase from 21.2 per cent in 2000 to 25 per cent in 2005.
"The agricultural self-employed group declined from 19.3 per cent to 16.1 per cent while non-agricultural self-employed households increased from 16.6 per cent to 17.1 per cent in the same period between 2000 and 2005. The salaried non-agricultural employees rose from 7.2 per cent to 8.8 per cent in the same period."
"Besides, for bottom deciles households, the proportion of heads with main occupation as agriculture day labour fell from 43.6 per cent to 36.3 per cent while non-agriculture day labour increased sharply from 21.9 per cent to 29.5 per cent between 2000 and 2005," the report said adding, this shift greatly contributed to their increased economic welfare, since non-agricultural returns are higher, even for daily labour.
About the reasons for the gradual shift of occupation, the WB report opined that the mean real wage rate for non-agricultural day-labours remained about 40 per cent higher than those for agricultural day labours.
The daily real wage rate for the agriculture was Tk 68.6 and for non-agricultural it was Tk 99.3 in 2000, which went up to Tk 71.9 and Tk 100.6 respectively in 2005, the Bank report added.
However, the WB analysis revealed that the extreme poverty remains associated with having larger household size, less education and small amount of land and being involved in low productivity jobs, particularly manual labour, both agricultural and non-agricultural.
Although a period of steady broad-based growth enabled Bangladesh to make notable reduction in extreme poverty incidence during 2000 and 2005, yet the country still faces daunting challenges with about a quarter of the population. or around 35 million people. Hence, public policy needs to retain its focus on the poor in general and on the extreme poor in particular, the report said.
The WB report suggested that the government should focus on creating enabling environment for job creation in the Western region of Bangladesh, increasing female participation rates in the labour market and helping narrow the female-male wage rate gaps, investment in social programmes such as family planning and female education and strengthen the food security policy in the areas where much extreme poor live.