Rural Transformation, Occupational Choice and Poverty Reduction in Bangladesh during 2010-2016

Abstract

Between 2010 and 2016, 90 per cent of the poverty reduction of Bangladesh occurred in rural areas. The gains in poverty reduction were largely driven by non-agricultural sectors (i.e., both industry and services). This paper describes the recent evolution of employment and wages in rural Bangladesh. The analysis highlights the increasing trend into non-farm employment in the rural sector and some of the factors linked to the choice of non-farm jobs. The paper relies on the Household Income and Expenditure Surveys for 2010 and 2016 with additional evidence drawn from the Labour Force Surveys. Overall, there has been a more pronounced non-farm orientation of jobs in rural areas since 2010. This process has been observed for both males and females, and for those with higher education levels. Better connectivity and microfinance are also positively linked with off-farm employment. The increase in non-farm employment was much faster in Eastern than Western divisions of the country, which can partly explain the re-emergence of the East-West divide in terms of welfare after 2010.