Household Income Dynamics and Wage Inequality In Bangladesh: Evidence From Hies 2010 And 2016

Al Mamun, Md. Arfanuzzaman () and Nusrat Jahan Nishat
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Al Mamun: Center for Policy and Economic Research (CPER), Bangladesh
Md. Arfanuzzaman: Food and Agriculture Organization of the United Nations (FAO), Bangladesh
Nusrat Jahan Nishat: Independent University, Bangladesh

Journal of Economic Development, 2023, vol. 48, issue 3, 91-110

Abstract: The study used the Household Income and Expenditure Survey (HIES) data from 2010 and 2016 of Bangladesh to examine the effects of human capital (education, experience) and social factors (age, gender, location, economic activity) on income using the OLS and IV (2SLS and GMM) regression methods. The study suggests that both education and experience positively affected income in both rural and urban areas. The gender wage gap, rural-urban wage gap, and industrial and service sector wage gap all climbed to 44.1 percent, 19.4 percent, and 5 percent, respectively, in 2016, much higher than in 2010. It has emerged that both urban males and females earn significantly more than their rural counterparts in both periods. The study found a wage dominance of the service sector over the agricultural and industrial sectors in 2016. Besides, the gap between the agricultural and non-agricultural sector’s wages decreased significantly in 2016, indicating decent wage growth in the agriculture sector. As both human capital and social factors have a remarkable contribution to income, strategic planning, and investment are required to reduce inequality and wage gaps and advance inclusive development in Bangladesh.

Keywords: Bangladesh; Economic Development; Gender Wage Gap; HIES 2016; Human Capital; Wage Inequality (search for similar items in EconPapers)
JEL-codes: I30 J00 J30 L30 O20 R10 (search for similar items in EconPapers)
Date: 2023
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