A Study on Unemployment Scenario of Bangladesh

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Chapter- 1: Introduction

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1.1 Introduction
Bangladesh is a land having an area of 1, 47,570 square kilometers with a huge population of approximately 15 crore. This is a predominantly an alluvial land where people get crops easily for their physical and mental set up is not conducive to working hard. Another characteristic of this land is that it is situated in the sub tropical region where fertility of the people is higher. So people here multiply within very short time. These are some of the traditional characteristics of our people. Bangladesh is beset with numerous serious problems and unemployment is one of those. The country's unemployment scenario is very alarming as 20 million, of the total estimated workforce of 70 million, remain unemployed posing a threat to the economy and causing a national concern. This unfortunate situation has resulted from the lack of adequate employment opportunities at home and the country's failure to avail itself of the opportunity for securing their jobs abroad as most of them are unskilled. In the present day world, manpower is considered everywhere as precious national assets, but it is disappointing that we are unable to utilize properly our human resources. Ours is a poor country with limited resources and naturally unable to meet the basic needs of the people. It is not difficult to understand that these huge jobless people are passing days in dire hardship and contributing to the social instability. They are considered as a burden not on themselves and their families alone, but also on the nation which is deprived of their services. Being mainly a primary commodity producing country with lesser area of land and lesser working opportunity along with the above mentioned characteristics of the people has been a logical consequence. But in the present day competitive world unemployment problem has created tension among the people. So it has now become a great social evil of the country. The International Labor Organization (ILO) reports that the rate of growth of unemployment in Bangladesh was 1.9% in the decade of the nineties. But the growth in unemployment cu rrently is 3.7%. The ILO figures also show Bangladesh in the twelfth position among the top twenty countries in the world where unemployment is rising. The way the rate of unemployment is increasing. It is feared that at this rate unemployment world soar to some 60 million by 2015. According to another estimate every year some 2.7 million young persons are becoming eligible for jobs whereas only about 0.7 million of them are getting employment. This leaves 2.0 people unemployed each year even though Bangladesh has managed to maintain a GDP growth rate of 5% and above during the last five years. In this study I will try to identify unemployment rate by age group and unemployment rate by level of education as well as compare different level of unemployment rates. Furthermore I would seek out the inherent problems of unemployment in Bangladesh. Finally I provide suggestion and policy recommendations for reducing unemployment problem. For clear representation this assignment has

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been organized by the following sections: section 1 briefs the objective of the study; section 2 represents the methodology of the study; section 3 represents some conceptual issues regarding unemployment, its types and effects and finally section 4 provides some suggestions and policy recommendations.

1.2 Statement of the problem

Technically speaking, unemployment is defined as a state of affairs when in a country there are a large number of able-bodied persons of working age who are willingly to work but cannot find work at the current wage levels. Unemployment has two aspects-Rural and Urban. Rural Unemployment problem is seasonal. Urban Unemployment problem is either industrial or educational. These terms may be further grouped in to voluntary and involuntary unemployment, Frictional Unemployment, technological unemployment, seasonal unemployment, disguised unemployment, st uctural r

unemployment, cycle unemployment etc. Structural unemployment occurs when the labor market no longer requires a particular skill as in the case of printing newspaper; new technology and new materials replace older working habits. Among these voluntary, disguised, seasonal and technological unemployment are found in Bangladesh. Involuntary unemployment means "the people who want to get a job at a given wage don't get it". Disguised unemployment refers to a situation where too many people are engaged in various sectors, particularly in agriculture. A common characteristic of the over populated underdeveloped countries is that a large majority of the population draw their livelihood from agriculture. Our population is increasing rapidly but our industrialization is developing slowly. By technological unemployment we mean that in a growing economy technique of production are constantly changing with the result that people are likely to lose their jobs when these are replaced by newer and more efficient techniques. For example if different banks and offices are computerized many people working there will become unemployed. Our unemployed youths are totally influenced by the effect of unemployment. Thousands of graduates and post graduates are passing out colleges and universities but they are not eligible for public jobs. This situation prevails in unorganized sectors in rural agriculture and urban areas are equally alarming. The unemployment people and their families live a very miserable life. So the bad effects have given rise to various social crimes. The unemployment people become frustrated. They have grown cynical and finer values hold but very little attraction to them. Their pent up frustration gets outlets through the destructive politics of students, campus violence, wide spread drug addiction, seduction, looting, rapes, murders, sabotages, generation clash and various social crimes.

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1.3 Significant and Rationale of the Study

1.4 Objectives of the study

The objectives of the study were as follows: 1. To identify unemployment rate by age group and by level of education; 2. To make a comparison between urban and rural unemployment and 3. To know the inherent problems of unemployment in Bangladesh.

1.5 Conceptual Framework 1.6 Scope of the Study

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Chapter- 2: Review of Related Literature

Chapter-3: Methodology 3.1 Methodology of the Study

The study is fully based on secondary data collected from different secondary sources like Bangladesh Economic Survey, Bangladesh Economic Review, Statistical year Book-2008, Bangladesh Journal of Political Economy, Labor Force Survey, Monthly Publications of the Student views, Relevant Journals, Annual report of Bangladesh Bank. Data have also been collected from various newspapers, related research studies, publications, Government documents, media documents and internet. The study covers the period of 1999-2007. Data have been presented in tabular and graphical forms and discussed accordingly. In analyzing data linear trend analysis has been utilized.

3.2 Source of Data

3.3 Population

3.4 Sample of the Study 3.5 Data collection Tools

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Chapter-4: Data analysis and Description of Data 4.0 Data analysis and representation
Key statistics regarding actual unemployment in Bangladesh published by various agencies have given varied reports. The labor force survey report published by Bangladesh bureau of statistics allegedly under reports unemployment and underemployment statistics due to fear of public backlash. Reports of NGO's can be questioned due to their limited capacity to assess the overall situation of entire Bangladesh, not to mention their general intent. But the study of various reports will give us some idea of the intensity of the situation. A report published by the Asian Development Banks (2003) regarding development and educated unemployed in south Asia states that the withdrawal of public sectors from the labor market did not result in a large expansion in the private sectors as was expected. The expectation that the retreat of public sector from the job market would be filled by job creating activities of the private sector and civil society did not materialized. Whatever employment had occurred within the private sector was mostly in the semi-skilled or low skilled areas. Thus very little employment was generated for the educated (ADB, 2003). In one of the recruitment processes of a local bank for the post of Management Trainee 9000 people applied for 40 posts. Other banks and multinationals face similar numbers when they opt for recruitment. Another recruitment process of primary teachers for the post of Assistant Head Master nine lakh and fifty thousand people have applied for 25 thousand posts. Educations have positive influence on employment. Moreover a comparison of data in urban areas in 2000 and 2006 reveals that the increase of SSC and above education is higher in the later year. This indicates a movement of the economy to more knowledge based activities. At the same time it can be noted that number of other education levels and SSC in rural areas on a comparative basis did not increase or even slightly decreased. This implies a lack of employment opportunity to utilize school education or a decline of the returns to education due to deterioration of quality.

Chapter-5: Findings and Recommendations 5.1 Findings

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This study reveals that unemployment rate in Bangladesh is much higher among the people who have passed SSC and HSC. Table No- 1. Represent unemployment rates at different level of education in the period of 2006-2007. It is clear that the unemployment rate in HSC and equivalent education level is much higher than the unemployment rates of other education level.

Table No. 1. Unemployment Rates by Level of Education and Sex, 2005 -2006
Level of Education Class-v Class-vi-viii Class-ix-x SSC and Equivalent HSC and Equivalent Degree and above Masters/ Equivalent Male 03.19 05.04 06.75 07.78 09.98 06.83 05.40 Female 02.32 03.81 05.30 06.79 08.58 06.02 04.48 Total 06.00 09.72 13.37 12.73 17.81 11.37 10.31

Source: Labor Force Survey Report 2005-06. B.B.S.

Table No. 2. Unemployment Rates by Level of Residence and Sex, 2005-2006

Level of Education Male Class-v Class-vi-viii Class-ix-x SSC & Equiv. HSC & Equiv. Degree and above Masters/ Equiv. 02.86 05.05 07.23 06.21 08.39 05.57 04.25 Urban Female 02.33 03.68 05.37 05.05 07.12 05.24 03.40 Total 04.51 10.11 15.40 10.98 14.17 07.31 08.22 Male 03.28 05.04 06.59 08.56 11.33 08.53 08.70 Rural Female 02.31 03.85 05.29 07.62 09.75 07.05 07.33 Total 06.42 09.60 12.72 13.86 22.18 17.80 20.94

Source: Labor Force Survey Report 2005-06. B.B.S.

The table 2 shows that female unemployment rates in urban and rural areas from class (i v) to masters/equivalent are too much high. One of the main reasons of female high unemployment is that

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entrepreneurs are reluctant to appoint female educated person in various sectors. It also reveals that after every level of education the unemployment rate is increasing. But rates are somewhat acceptable in case of Degree and Masters Level. If we observe the entire table, we will find that rural female unemployment rate each level of education is highest.

Table No. 3. Unemployment rate by age group, sex and residence, 2005-06
Age Group 15-19 20-24 25-29 30-34 35+ Total 08.67 09.71 06.15 02.93 01.90 Bangladesh Male 06.53 09.33 05.68 02.00 01.09 Female 21.47 10.65 07.21 05.24 04.53 Total 08.03 09.40 08.70 02.34 01.72 Urban Male 07.67 09.13 08.13 01.49 01.07 Female 09.03 10.02 10.14 04.77 04.24 Total 08.87 09.80 05.26 03.11 01.96 Rural Male 06.27 09.38 04.79 02.81 01.10 Female 30.27 10.84 06.21 05.44 04.78

Source: Labor Force Survey Report 2005-06. B.B.S.

Table No. 4. Rate of unemployment by sex and residence 1999-2000

Age Group 15-19 20-24 25-29 30-34 35+ Total 01.90 11.20 04.20 01.00 0.40 Bangladesh Male 0.20 0.10 03.90 01.10 0.30 Female 31.60 13.90 03.80 0.80 01.20 Total 22.60 14.70 06.90 02.20 0.80 Urban Male 29.50 13.40 05.70 01.60 01.50 Female 17.90 10.00 03.30 0.60 0.30 Total 13.60 08.30 03.30 0.60 0.20 Rural Male 32.04 14.00 03.20 0.50 01.10 Female 32.40 14.00 03.20 0.50 01.10

Source: Labor Force Survey Report 2005-06. B.B.S.

Table No. 3 and 4 represent unemployment rate at different age groups from 15 to 35+ years. In case of Bangladesh, the rate of male unemployment for the age groups 15-19 and 20-24 in the year 200606 has increased compared to the period of 1999-2000 of the same groups, whereas female unemployment rate in Bangladesh of the age groups 15-19 and 20-24 in 2005-2006 has decreased compared to the table 4 in 1999-2000 of the same groups. But the rate of male and female

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unemployment in both urban and rural areas in 2005-2006 has decreased compared to the period of 1999-2000 in the same groups, whereas female unemployment rate in urban area of age group20-24 in 2005-2006 almost remains the same compared to the table 4 in 1999-2000 of the same groups. But table 3 both male and female unemployment rate, in the age groups 25-29, 30-34 and 35+ in the year of 2005-2006 in urban and rural areas of Bangladesh, has increased compared to the table 4 for the period of 1999-2000 of the same groups. We saw that in aggregate level the unemployment rate decreased in 2006 compared to that of 1999 but male unemployment rate increased gradually. Here it can be mentioned that the female unemployment rate decreased despite the status in rural areas are not up to the mark.

5.2 Recommendations
Some suggestion and policy recommendations are as follows:
y

Foreign investment is inevitable for reducing unemployment problem of Bangladesh. Stable political condition is perquisite for that type of investment. We should develop a political calm environment where foreign investment frequently comes. Many Asian developing countries are the bright example.

Industrialization is the most important factor for solving unemployment problem. Huge numbers of large and small industries are closed. As a result unemployment has increased instead of decreasing. For solving unemployment problem the Government must have to restart the mills and factories which are remain closed.

After political settlement the first and foremost thing for Bangladesh is to build up new industry to remove the unemployment problem. To intensify the overall industrialization our Ambassadors who are employed in different countries specially Japan, Korea, Malaysia, and Singapore can help the government to adopt strong effective, active and successful policy.

We should pay attention strongly to vocational and technical education. Government can make a big contribution towards reducing unemployment by also building and operating a large number of training institutions and training the jobless ones there for employment in home and abroad.

We have to keep pace with modern science and technology. Students should have knowledge about computer. For this reason computer education may be introduced from the school level as a compulsory subject. Under this situation huge number of computers will be needed for each school, but you may introduce first in the divisional areas then across the country.

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Language efficiency is another important factor for getting job. Every year thousands of students are coming out from colleges and universities but they are not able to speak in English. Necessity off learning English is unquestionable. To develop their language efficiency, the Government should introduce language course from the school level as a compulsory subject so that the student can make themselves from their boyho od. This language course might be completed by using several steps. It will be started from SSC level and continue up to honors level. Step by step they will learn spoken English and build up their career.

Present Government wants to build up a digital Bangladesh by 2021. For achieving the objective of building a digital Bangladesh and to remain competitive in the world market, there is need to increase the allocation to science and technology across the country.

The scope and coverage of the Equity Entrepreneurship Fund (EEF) should be extended beyond agriculture and IT-enabled services (ITES) to cover other potential areas like electronics, light engineering.

Financial institution can also be persuaded through appropriate policy measure to extend loans on easy term and conditions to overseas job seekers whom they would be able to pay back on taking up employment abroad. Furthermore private manpower agents do also need to work with integrity and efficiency so much increase the prospects for gainful foreign employment by a greater number of Bangladesh.

There are no exhaustive remedies for unemployment problem nonetheless solving unemployment is a continuous process. So we should take utmost effort to develop our condition through proper plan. It is robustly experienced that further study should be carried out using different sets of variables and appropriate mathematical models to express the unemployment scenario of Bangladesh.

References
Annon (2008). The financial express, Dhaka, Bangladesh. Retrieved June 6, 2011, from http://www.thefinancialexpress-bd.com A. K. Foundations (2009). Student Views, Dhaka, p. 17. Ahuja, H.L. (1995). Macroeconomics, New Delhi: S Chand & Company, p.131.

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Annon (2003). Human Development in South Asia, Asian Development Bank, p.26. Islam, R. R. (2008). An Analysis of Real Wage in Bangladesh and its Implications Underemployment and Poverty. Student View, K.K. Foundation, Dhaka. Siddiqui, A. M. A. H. (1988). Employment of Bangladesh Nationals- An Overview. Bangladesh Journal of Political Economy, 8(2), 149-158.

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