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Why is the relative preference for government jobs on the rise in Bangladesh? Evidence from labour force surveys

Mustafizur Rahman and Md. Al-Hasan ()

MPRA Paper from University Library of Munich, Germany

Abstract: This article examines the underlying factors contributing to the changing scenario concerning relative attractiveness of public sector jobs in Bangladesh vis-à-vis private sector jobs. The article quantifies wage differentials between the public and the private sector, and examines the changes as regards earnings inequalities between group (public versus private) and within group (within private sector employees), in response to the new pay scale introduced for public sector employees in Bangladesh. The analysis reveals that following salary scale revision of particularly 2015, public sector jobs in the country have become more attractive for job seekers looking for salaried employment. Whilst there has been a shift favouring the entire range of wage distribution curve, it is more evident for jobs at the entry level. Although the higher-paid private sector employees appear to have been able to adjust their salaries in response to government pay scale revision, the relatively low-paid ones in the private sector have not been able to. Additionally, public sector jobs have the added advantage of non-wage benefits of larger coverage compared to the private sector. All these factors have combined to bring a shift in preference in favour of public sector jobs in Bangladesh. The article has argued that the recent ‘quota movement’ in Bangladesh, with the demand to revise the existing quota system in the country, reflects this shifting preference on the part of those entering the job market in recent times.

Keywords: Wage Differentials; Quantile Decomposition; Quantile Regression; Public Employment; Employment Benefits (search for similar items in EconPapers)
JEL-codes: C21 E20 J31 J32 J45 P35 (search for similar items in EconPapers)
Date: 2018-07
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