Investigating the Link between Education and Labor Market Dynamics: The Case of Bangladesh

Abstract

With a substantive impact on almost all facets of human life, education remains a central issue in development policies. Likewise, the role of education in labor market outcomes has largely been debated and discussed since the last few decades. The case is more relevant for developing countries, where consistent economic growth requires an effective labor market equipped with an educated and skilled labor force. In addition to giving particular focus to policy considerations, this study investigates how differences in educational attainment are linked to labor market outcomes in Bangladesh. A critical analysis of relevant documents and the latest statistical facts has revealed that education has a direct impact on labor market participation, occupational segregation, and wage differentials in Bangladesh’s labor economy. And also, this impact is persistently prevalent across age, sex, and regions. Several policy options are put forward in order to develop a better-educated labor force in Bangladesh’s labor market, resulting in increased labor productivity, higher earnings, and quality employment. This study is one of many focusing on the link between education and labor market outcomes in Bangladesh, and thus the study is expected to contribute to the existing labor market research to a large extent. Policymakers, labor economists, researchers, and academics will largely benefit from this study.