Inequality In Bangladesh Research Articles

Financial Development and Income Inequality in Bangladesh: Empirical Evidence from Vector Auto-Regression (VAR) Model

This study investigates the effect of financial development on inequality in Bangladesh. We run a vector autoregressive (VAR) model for the economy of Bangladesh from 1980 to 2020. Using the impulse response functions (IRFs), we find that the disposable income and market income Gini coefficients respond positively to private credit. It suggests that financial development contributes to raising inequality in Bangladesh. We also find that growth has an adverse impact on inequality whereas income inequality has a positive effect on economic growth. However, economic growth has a greater and more pronounced negative effect on inequality than inequality itself, even though these two variables exhibit opposite interaction responses. It indicates that growth lowers inequality in Bangladesh.The forecast error variance decomposition function shows that private credit can explain the variations of disposable income Gini by 8.65 percent; on the other hand, disposable income Gini can explain the variation of private credit by 8.90 percent.

Assessing the impact of rural electrification on economic growth: a comprehensive analysis considering informal economy and income inequality in Bangladesh

Assessing the impact of rural electrification on economic growth: a comprehensive analysis considering informal economy and income inequality in Bangladesh

The impact of personal remittance and RMG export income on income inequality in Bangladesh: evidence from an ARDL approach

PurposePersonal remittance and ready-made garments (RMG) export incomes have emerged as the largest source of foreign income for Bangladesh's economy. The study investigates their impact on income inequality and gross domestic product (GDP) as a control variable, using time-series yearly data from 1983 to 2018.Design/methodology/approachIt employs the Autoregressive Distributed Lag (ARDL) estimation and the Toda-Yamamoto (T-Y) causality approach. The ARDL estimation outcomes confirm a long-run association among the above variables and validate the autoregressive characteristic of the model.FindingsPersonal remittances positively contribute to reducing the income gap among the people of the society and declining income inequality. In contrast, RMG export income and economic growth contribute to further income inequality. The T-Y causality analysis follows the ARDL estimation outcomes and authenticates their robustness. It reveals a feedback relationship between remittance inflow and the Gini coefficient, unidirectional causalities from RMG export income to income inequality and economic growth to income inequality.Research limitations/implicationsThe finding has important policy implications to limit the income gaps between low and high-income groups by channeling incremental income to the lower-income group people. The policymakers may facilitate further international migration to attract further remittances and may upgrade the minimum wage of the RMG workers.Originality/valueThe study is original. As far as the authors' knowledge goes, this is a maiden attempt to investigate the impact of personal remittances and RMG export income on income disparity in the case of Bangladesh.

A Conceptual Study on Income Inequality and Economic Growth in Bangladesh

Reducing income inequality through economic growth remains a debatable issue in economic development literature and has long been the subject of extensive research. The relationship between these two factors is complex and dynamic, with the direction and strength of the relationship varying across countries and over time. Bangladesh as a developing country keeps a commendably steady growth of GDP in the recent decade. While it is believed that the growth trajectory pours its benefits in curbing income inequality, in reality, the poorer become the poorest, and the richer become the richest over the decade in Bangladesh. Therefore, the debate over economic growth and income inequality has become a great controversy. Numerous studies in Bangladesh have investigated the connection between economic growth and income inequality, but the results have been inconclusive. While some research has revealed a link between income inequality and economic growth, other studies have not identified any notable association. The issue of income inequality in Bangladesh is further complicated by the country's ongoing efforts to reduce poverty, which has resulted in both positive and negative impacts on income inequality. The lack of consensus in the literature highlights the need for continued research in this area. In light of these findings, the purpose of this conceptual paper is to review the existing literature on the relationship between income inequality and economic growth in Bangladesh. This paper provides a comprehensive overview of the various theories and empirical studies that have been conducted in this area, including the latest findings and research gaps. The paper concludes by highlighting the need for further research in order to better understand the complex and dynamic relationship between income inequality and economic growth in Bangladesh. Keywords: Income Inequality, Economic Growth, Conceptual Study, Bangladesh DOI: 10.7176/JESD/14-5-04 Publication date: March 31 st 2023

Spatial inequality in Bangladesh: A geospatial analysis

Spatial inequality of development is an important issue in Bangladesh. In this study a set of sectors-education, infrastructure, health, and economy-and sectoral components/indicators were selected aiming at investigating the spatial inequality scenario of Bangladesh. All components/indicators of each sector were weighted overlaid using ArcGIS tool. Finally, the overall spatial inequality of development was generated overlaying all the sectoral inequality maps. The spatial inequalities were revealed categorically from the highest overlaid cell value as the most lagged area to the lowest value as the most advance area. A serious centralized character towards the capital Dhaka was identified almost in all the sectors in spatial inequality maps of Bangladesh. The overall spatial inequality map identified a total of 16 districts in the comparatively ‘lagged area’ category; and 44 districts in the category of the ‘moderate area’. Only one district (the capital Dhaka) was identified in the category of ‘most advance area’, while three districts (Chittagong, Gazipur, Narayanganj) found in the ‘advance area’ category. Most of the lagged districts were identified in the north-west and north-east parts of Bangladesh. Besides, the districts of Chittagong Hill Tracts (Bandarban, Khagrachari, Rangamati) were also found most lagged..

COVID-19, Poverty, and Inequality in Bangladesh

The COVID-19 pandemic has shaken the global economy and the livelihoods of disadvantaged populations. Bangladesh, like other developing countries, has been hit hard, and marginalized groups have suffered the most. Before the pandemic, Bangladesh’s economy was growing rapidly, and the country was known for its steady improvement in health and education development indicators. Yet in its pandemic response, the government has been unable to provide adequate aid and health facilities for the large population living in poverty. The response has been hampered by lack of resources, corruption in the delivery of economic support, and existing health inequalities.

The dynamics of asymmetry among fertility, income inequality and financial development in Bangladesh

This research studies the extent of asymmetric responses of general fertility rate with financial development and income inequality in Bangladesh utilizing annual data from 1984-2019. We employ both linear and non- linear autoregressive distributed lag methodologies. Our study identifies a long run stable equilibrium among fertility rate, financial development and income inequality under assumptions of symmetric and asymmetric relationships between fertility and each of the control variables. Findings suggest effects of positive and negative shocks in financial development have negative and significant influence on the fertility rate in the long run. Therefore, in Bangladesh old age security hypothesis does not hold in the long run. Findings affirm that there are significant long run and short run asymmetries between fertility and financial development. However, there exists no significant short run and long- run asymmetries between fertility and Inequality. Families consider the ‘trade-off’ between quality and quantity of the children. Government could provide subsidy to private and informal sector to reduce the opportunity cost of rearing children for low- income families. Government could also support employment opportunities for women in non -conventional agricultural farming sector such as mixed cropping and floriculture

Do Financial and Economic Development Have an Impact on Income Inequality? A Study on Bangladesh

This research attempts to determine why individuals are unable to achieve their fundamental necessities despite increased financial and economic growth by investigating the relationship between financial and economic development with income disparity.Alternatively, this paper examines, from the viewpoint of Bangladesh, the implications of the Financial Kuznets Curve hypothesis, a theory established in three phases based on Kuznets’s seminal 1955 work. The time series data of nine elements over the 28 years from 1993-94 to 2020-21 has been used in the study. The study employs the Autoregressive Distributed Lag method (ARDL)and Granger Casualty Test to identify the effect of financial and economic development on income inequality in Bangladesh. Principal Component Analysis (PCA) has been used to develop indicators for financial development and economic development. The study reveals that financial and economic development affect income inequality in Bangladesh; in fact, they increased income inequality over the years in this country. This indicates that the FKC hypothesis holds in Bangladesh, as FKC states that Financial and economic development constitutes a converse U-shaped relationship with income inequality, meaning that income inequality increases during the primary phase and continues in the medium phase of development. As Bangladesh is going through a development phase, income inequality is increasing.

Mobile Phone Ownership, Household Welfare, and Income Inequality in Bangladesh

Mobile Phone Ownership, Household Welfare, and Income Inequality in Bangladesh

Convergence across subnational regions of Bangladesh – what the night lights data say?

We examine economic convergence among subnational regions of Bangladesh over the period 1992–2013. Unavailability of the traditional gross domestic product (GDP) for subnational areas and building on findings of recent luminosity literature, we use night lights intensity as a proxy for local economic activity to test the convergence hypothesis. Our results show the existence of both absolute and conditional convergence in night lights intensity, but with a very long half-life of convergence. Moreover, the results also indicate sigma divergence. Together, these findings suggest that regional disparity is persistent and wide across Bangladesh's 544 upazilas (subdistricts). There is evidence that lagging upazilas are catching up with the better off ones, but many are also converging with their neighbors or peers (a phenomenon known as “club convergence”). Overall, consistent with the evidence from studies on regional inequality in Bangladesh, our results also indicate that there is an “east-west” divide in luminosity across the subnational units in Bangladesh.

Effects of Remittances on Income Inequality in Bangladesh: A Macroeconomic Analysis

This study attempts to examine the effects of remittances on income inequality in Bangladesh over the period of 1990 to 2016. The study period has been chosen based on data availability at macro level. To serve the purpose, Autoregressive Distributed Lag (ARDL) cointegration technique is applied since unit root test confirms a combination of variables some which are stationary at level and others become stationary after first difference. The error correction model estimated by reparametrizing the ARDL model after having confirmation about the existence of long run relationship through bound test. An inverted U-shaped relationship between the remittances and income inequality has been found by the study. Remittances increase income inequality in short run and decrease income inequality in the long run. In the long run an increase in remittances by 1 per cent reduces the income inequality by 11 per cent on an average. The adjustment coefficient has the expected negative sign at 1 per cent level of significance which ensure a monotonically convergent adjustment towards the equilibrium with the speed of 21.65 per cent. Among other control variables, private credit increases income inequality in the long run and decrease it in the short run. Exchange rate and inflation either have very negligible effects or no significant effects both in short run and in long run. Based on the findings, it could be suggested that the country should take proper steps to encourage investment of remittances in productive activities to accumulate capital which could ensure the path of accruing the beneficial impacts of remittances on income inequality in the long run.

Exports and Inequality: Evidence from the Highly Concentrated Textile and Garment Sector of Bangladesh

In this study, we investigate the effects of textile and garment (T&G) exports on income inequality in Bangladesh. Focusing on T&G exports alone, which contribute more than 90% of the country’s total exports, we hypothesize that the export sector of a country being concentrated on a single industry widens income inequality. Based on time series data over the period 1991–2015, the autoregressive distributed lag (ARDL) bounds testing approach to cointegration indicates that there is a long-run relationship between the variables. It seems that exports from the T&G sector have a statistically significant effect on income inequality in the long run, such that the high concentration of T&G exports contributes to widening income inequality in Bangladesh. This result implies that policies oriented toward export diversification are necessary so that people working in other sectors can also engage in income generating activities from exports. Our results also demonstrate that income inequality rises in the initial stages of economic growth. Then, after reaching a threshold level of growth, income inequality falls. This result confirms the validity of the Kuznets hypothesis in the case of Bangladesh.

Impact of Poverty and Inequality on Economic Growth of Bangladesh

The radiation of poverty in Bangladesh is one of the highest in the world and millions of people suffer from the anguish of poverty. The country’s poverty rose to 29.5 percent as of June, 2020 due to Covid-19, which was 20.5 percent in the last fiscal year 2019. Moreover, inequality make bad the persistence of poverty. This study attempts to focus on the poverty trends, economic growth and inequality in Bangladesh. Poverty is a multi-faced problem in the developing world and it is much more complex in rural setting. This study is also focused on to decompose inequality and poverty by rural, urban and national level household. The study is based on the analysis of secondary data which have been collected from different sources. The incidence of poverty has decreased to 20.5 percent from 31.5 percent in 2010. From the study, it is evident that, the incidence of poverty is higher in rural areas than that of the urban areas. This study tries to find the relationship among poverty inequality and growth. This study analysis GINI Index for income, Gini coefficient of per capita income of different survey years. The analysis shows a clear picture of the trend of poverty and inequality in Bangladesh. Using the Household Income and Expenditure survey of different years. This study attempt to figure out the relationship between inequality and per capita income. This study focusses on some problems of poverty and inequality and also mention some policy to eradicate of poverty and inequality. Keywords: Covid-19, Household Survey, Inequality, Per Capita Income, Poverty DOI: 10.7176/JESD/12-10-10 Publication date: May 31 st 2021

Exploring the Fundamental Factors of Digital Inequality in Bangladesh

Digital inequality is imperative to combat the perpetuation of national development and significantly exists in developing countries. Thus, the purpose of this article is to provide the underlying factors of creating digital inequality in Bangladesh. A mixed-method research approach was followed where both the qualitative and quantitative data were collected using focus group discussion (FGD), semi-structured interviews, and survey. The FGD and interviews were replicated with a total of 60 participants (each study with 30 participants), while 326 respondents participated in the survey study. The content analysis, word cloud, affinity diagram, and descriptive statistics were used to analyze the data. As an outcome, the studies revealed 23 factors that create digital inequality in Bangladesh. The factors were clustered into five groups (referred as elements) of digital inequality through an affinity diagram. The resultant elements of digital inequality were educational, infrastructural, social, economic, and usable design. The results reflect on what factors should consider ensuring the inclusion, adoption, and contributions of information and communications technology in Bangladesh, which in turn contributes to reducing the digital inequality in Bangladesh. As a practical contribution, this research provides an in-depth scenario of digital inclusion and exclusion in Bangladesh, and the underline factors of creating digital inequality, so that nongovernmental organizations and government organizations may take necessary initiatives toward each dimension of digital inequality. The results also include identification of future research agenda toward reducing digital inequality.

Convergence across Subnational Regions of Bangladesh – What the Night Lights Data Say?

We examine economic convergence among subnational regions of Bangladesh over the period 1992-2013. Absent the traditional gross domestic product (GDP) for subnational areas and building on the recent findings of luminosity literature, we use night lights intensity as a proxy for local economic activity to test the convergence hypothesis. Our results show the existence of both absolute and conditional convergence in night lights intensity, but with a very long half-lives of convergence. Moreover, the results also indicate sigma divergence. Together, these finding suggests that regional disparity is persistent and wide across the 544 upazilas (subdistricts) of Bangladesh. There is evidence that lagging upazilas are catching up with the better off ones, but many are also converging with their neighbors or peers (a phenomenon known as “club convergence”). Overall, consistent with the evidence from studies on regional inequality in Bangladesh, our results also indicate that there is an “east-west” divide in luminosity across the subnational units in Bangladesh.

Inequality in measles vaccination coverage in the “big six” countries of the WHO South-East Asia region

ABSTRACT The “big six” countries (Bangladesh, India, Indonesia, Myanmar, Nepal, and Thailand) in the World Health Organization South-East Asia Region (WHO SEAR) are currently facing severe challenges in measles elimination and consequent childhood mortality reduction, with inadequacies and inequalities in the coverage of the measles-containing-vaccine first-dose (MCV1) being major obstacles. However, these issues of inequality in MCV1 coverage have not yet been systematically examined. We used data from the latest Demographic and Health Surveys and Multiple Indicator Cluster Surveys. To provide a comprehensive picture of existing MCV1 coverage gaps, data were disaggregated by geographic location, as well as by socioeconomic and nutritional dimensions. National MCV1 coverage ranged from 77% in Myanmar to 92% in Thailand. Only nine of the 104 sub-national districts had achieved the 95% MCV1 coverage goal as set by the WHO. Geographic inequalities were more pronounced in countries with lower coverage levels. Areas in clusters with poor MCV1 coverage performances as well as disadvantaged socioeconomic profiles require increased attention. Inequalities were evident in all countries, except Thailand, and were more pronounced in the sectors of wealth, education, antenatal care (ANC) status, and vitamin A supplementation (VAS) when compared against the areas of gender and urban/rural residence. Wealth-related inequality in Bangladesh, education-related inequality in Indonesia, ANC-related inequalities in Myanmar and Nepal, and VAS-related inequalities in Indonesia and Myanmar were all noteworthy. Equity-oriented changes in policies focusing on health promotion and integrated interventions among disadvantaged populations need to be implemented in order to increase MCV1 coverage and reduce childhood mortality.

Bangladesh: Income Inequality and Globalization

Global anxiety about the effect of globalization is increasing. Throughout recent years the influence of globalization on income allocation has been fiercely discussed. This research carries out a time series review to examine the effect of globalization on income inequality in Bangladesh between 1975 and 2018. Study results indicate that globalization variables – exports, imports, foreign aid, foreign direct investment (FDI), and remittance inflows – have a significant long-term impact on income inequality in Bangladesh. Long-term foreign aid and imports are improving, while exports, FDI, and remittance inflows are deteriorating income distribution in Bangladesh during the study period. Nevertheless, in the short term, exports, imports, FDI have little to no impact in the model and a change in foreign aid and remittances will have a significant conservative force attempting to resolve the system.

Effects of Food Trade Liberalization on Poverty and Inequality in Bangladesh: A Partial Equilibrium Approach

Using a partial equilibrium model, we examine the effects of full tariffs withdrawal from food imports of Bangladesh on its poverty and inequality. We show that if tariffs are withdrawn from food imports, domestic food prices decrease, but the sizes of decreases in prices depend on import demand elasticities. Then we show that decreases in domestic prices affect households’ welfare or income in three channels. As consumers of food items, households gain real income/welfare as their food expenditures reduce. As laborers in the agriculture or food processing sector, households’ members may lose their income, as according to the Stolper-Samuelson theorem, changes in output prices may affect input prices positively. As sellers of food items, households lose their income. From Household Income and Expenditure Survey 2010, we find that the average effect of full tariffs withdrawal from food imports on households’ welfare is positive, as all households are consumers, but all are not laborers and sellers. So, the first channel is stronger than other channels. We have found that food trade liberalization reduces the poverty rate by 2.4 percentage points. However, the main food in Bangladesh is rice, which had no import tariff in our data period. We also produce results for rice trade liberalization. If the rice tariff were the highest ever (e.g., 19.4%) and the government reduced it to zero, the poverty rate would have decreased by 1.74 percentage points. Rice trade liberalization also reduces inequality, but trade liberalization of other foods does not influence inequality.

Wage inequality in Bangladesh, 2000–2010: an unconditional quantile regression decomposition

ABSTRACT This paper reports on an investigation into changes in wage inequality in Bangladesh between 2000 and 2010, based on gender, marital status, education, job industry, job sector, location, etc. The 2000 and 2010 Labour Force Surveys conducted by the Bangladesh Bureau of Statistics (BBS) provided the data used. Oaxaca–Blinder’s (1973) decomposition and regression of the (recentered) influence function (RIF) model of Firpo–Fortin–Lemieux (FFL)’s (2007) decomposition were used to identify the important factors that caused wage inequality in Bangladesh. Both methods showed that the coefficient effect is the main contributor to the overall increase in wage inequality.

URBAN AND RURAL DIMENSIONS OF THE ROLE OF EDUCATION IN INCOME INEQUALITY IN BANGLADESH

Using the 2005 and 2010 National Household Income and Expenditure Surveys, this study examines the urban and rural dimensions of the role of education in income inequality in Bangladesh. The government needs to expand the access to and the quality of primary education because a large proportion of citizens are uneducated. This would reduce not only the urban–rural educational gap but also the educational inequalities within urban and rural areas. As the income disparity between urban–rural and educational groups is small and more than 90% of overall income inequality is the result of inequalities within educational groups, the government needs to introduce policies that could reduce inequalities within such groups. In urban areas, policies to help reduce skill mismatches in the labor market are required, while non‐agricultural employment may need to be promoted to mitigate rural income inequality.