Understanding the Critical Aspects of South Asian Labor Market: Implications and Policy Responses

Abstract

Objectives: This paper attempts to explore the critical insights into the labor markets of South Asian countries taking ILO’s Key Indicators of the Labor Market (KILM) as an example for illustrations. In addition, the paper puts its lens on addressing adequate policies and program responses at country level, especially for Bangladesh. Methodology: This is basically a policy-focused study focusing on an extensive analysis of existing relevant documents and literature. The paper has therefore adopted three steps methodological approach: collecting, scrutinizing and analyzing. The required data were collected from secondary sources including strategic papers, technical notes, conference proceedings, statistical reports, research articles, relevant books and e-materials of reputed international organizations such as ILO and World Bank. Findings: A critical review of the existing facts and documents has revealed that despite geo-political and ethnical differences, South Asian labor economies are characterized with homogonous labor market characteristics including low labor force participation rate, gender gap in employment and wages, notable labor dependency ratio, working poor, sluggish wage growth, low labor productivity, excessive working hours, high NEET rate, and a state of labor underutilization. In addition, countries differ in terms of policy issues, implementation levels, data availability and compliance to ILO’s decent work agenda to a large extent. Recommendations: An integrated labor policy incorporating the lessons and experiences of developed countries, opinions of stakeholders and labor specialists, balanced and diversified development programs, compliance to ILO’s decent work agenda, and collaborative works with national and international labor organizations are supposed to contribute to better functioning of labor markets. Implications: Although this region of the world is blessed with abundant labor force, a critical analysis has revealed several implications at both national and regional level. The current scenario of lower labor force participation rate and higher time-related underemployment indicate the absence of policies for the fullest utilization of this golden human resource. In addition, slow or negative wage growth and poor wages badly affect the living standards of workers. Despite the consecutive growth in industry and service sector, still the employment in this region is predominantly agricultural which in turn is largely responsible for informal employment. Value/Originality: This study is one of very few labor market studies focusing on the critical aspects of South Asian labor markets. The paper is therefore expected to add value to the existing field of regional labor market research. Academics, researchers, policymakers and stakeholders are largely be benefited from this study.