Labour Market Characteristics In Rural Bangladesh After The 1998 Flood

This paper is one of the few attempts to describe and analyze labor market issues relative to labor market participation and labor supply and demand for labor in rural Bangladesh at the time of the 1998 flood. It presents empirical estimates of the supply function of daily laborers and of the demand for labor in crop production using a panel data set of 750 households. The findings reveal a labor market characterized by low participation rate and low overt unemployment. The participation rate of females is particularly low and may be explained in part by the involvement of a large majority of females in housework and in school (for 10-14 years old). Among those who participate in the labor market, more than one-third were found to be daily laborers, who were mostly males aged between 25 to 54 years earning a daily wage rate varying from Tk. 55 to Tk. 60 including meals. The analysis of the demand for labor shows that hired labor was one-third of all labor used in the rural agricultural labor market and larger farmers (with 150 or more decimals of land) used more hired laborers than smaller farmers (with less than 50 decimals of land). Total labor use as well as labor demand per acre also increased from November '98, just after the flood to round 2 April, and the loss of labor demand suffered during the period of the flood was offset, at least to some extent, by higher demand and higher earnings in the period after the flood.