SOC 1105

1/13/2021 SOCIOLOGY AND

PSYCHOLOGY

GROUP ASSIGNMENT 1

TOPIC: UNEMPLOYMENT OF
BANGLADESH

DONE BY:
ASIF KHAN (114193002)
TONMOY DAS (111201264)

FALL 2020 TRIMESTER

SECTION: B

SUBMITTED TO:
PROFESSOR ASM SHAFIQUL
ISLAM
SCHOOL OF BUSINESS &
ECONOMICS
 TABLE OF CONTENTS

I. INTRODUCTION.......................................................................2

II. STATEMENT OF THE PROBLEM...........................................2

III. BASIC RESEARCH QUESTIONS............................................2

IV. DISCUSSIONS:..........................................................................3

A) DEFINITION OF UNEMPLOYMENT & THE MAJOR

TYPES OF UNEMPLOYMENT IN BANGLADESH...............3

B) CURRENT UNEMPLOYMENT SITUATION IN

BANGLADESH..........................................................................5

C) CURRENT SITUATION RELATING GENDER AND

UNEMPLOYMENT....................................................................7

D) EFFECTS OF UNEMPLOYMENT.......................................8

V. RECOMMENDATIONS:.........................................................10

A) STEPS TO REDUCE UNEMPLOYMENT/SOLUTIONS

OF UNEMPLOYMENT............................................................10

VI. CONCLUSION.........................................................................12

VII. REFERENCES..........................................................................13

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 INTRODUCTION

The unemployment rate serves as one of the best-known criterions of the labour market and certainly
is one of the most focused areas ubiquitously quoted by the media globally. It demonstrates the
impotence of a nation to produce employment opportunities for those individuals who are available
for employment and actively seeking work. Thus, it is efficaciously effective to describe the efficacy
of an economy to absorb its labour force along with the performance of its labour market. It is usually
observed that the unemployment rate in a booming economy gradually decreases whereas the rate
surges drastically if there is a downturn in the economy. The unemployment data also functions as one
of the determinants of consumer confidence levels in a nation.

STATEMENT OF THE PROBLEM

This report illustrates the complexities faced in Bangladesh due to the current unemployment
conditions. It describes the major types of unemployment observed along with the individual reasons
for their occurrences. The report also concerns itself with the current unemployment state of the
economy giving concentration to prominent sectors like participation of youth in the labour force,
relationship between GDP growth and unemployment, gender role in the economic development
along with the sector wise unemployment rate for the entire economy. Moreover, it addresses the
potential demerit of unemployment for the comprehensive society. Also, it involves the prospective
steps and strategies that has been taken or needs to be implemented as a medium to meliorate the
unemployment situation. Furthermore, the report has been based on multiple reputable sources
including reputable websites, recent researches and government surveys to provide the contemporary
factual scenario along with the meticulous scope for amelioration of unemployment.

BASIC RESEARCH QUESTIONS

This report answers to generic questions like: What is unemployment in an economy? What are the
major types of unemployment faced in Bangladesh? What is the present unemployment situation
and trend observed in Bangladesh? How are the gender roles effecting unemployment situation in
our economy? Moreover, what are the effects of unemployment in respect to Bangladesh’s

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economy? In addition, what could be the potential initiatives and steps to meliorate the
unemployment conditions in our economy? Along with an evaluation of what would be the best
possible effectuated step to succour employment growth?

DISCUSSIONS:

DEFINITION OF UNEMPLOYMENT & THE MAJOR TYPES

OF UNEMPLOYMENT IN BANGLADESH

Unemployment is defined as a situation where an individual who is willing and able to work is not
able to get a job. It specifically refers to those people who are employable and seeking a job being in
the labour force is jobless/does not have an appropriate job. It serves as one of the critical indicators
of the economic standard, and is measured by the unemployment rate which is calculated by dividing
by the total number of unemployed people in the workforce by the total number of individuals in the
workforce.

The proportion of unemployed individuals in the total labour force is called the national
unemployment rate. It serves as a key index of the performance of a nation’s labour market. As it
remains an important tool for measuring health of an economy, it captivates a lot of attention from
media, political parties etc. especially during recession and economic downturns. This is because the
unemployment rate doesn't just affect those people who are workless–the level and perseverance of
the factors of unemployment have outspread consequences across the comprehensive economy.

The major types of unemployment in Bangladesh

1. Frictional unemployment

The unemployment caused by the time it takes individuals to move between jobs, for example, the
graduates or people changing jobs. This occurs when individuals leave their old jobs in search for a
new one. Often these individuals leave voluntarily either because they need to move elsewhere or has
saved enough money to look out for a better acceptable job. As a result. This type of unemployment
persists in every economy due to the fact that it takes time to find new work and the information
system isn’t perfect.

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2. Structural unemployment

The unemployment caused by the mismatch between the skills obtained by an individual and the skills
required by the employers or are in demand. As a result, the skills of the workers do not meet the
skills desired by an employer. The major causes of structural unemployment are mentioned below:

Occupational immobility: This refers to the difficulties in comprehending new skills by an individual
as specified by any new industry. For example, an unemployed farmer will find it difficult to gain
expertise in skills desired by a new tech industry.

Geographical immobility: The barriers that arise during moving from one place to another to get a job.
For example, there may be desirable job available in London but it may be arduous to find suitable
accommodation due to the associated price factor.

Technological change: The introduction of new technological advancement can significantly affect an
economy by causing some of the existing jobs to become obsolete which will leave many individuals
unemployed. For example, the new machines developed for packaging purposes has led many
labours working in the factory to become unemployed.

3. Cyclical Unemployment

The involuntary unemployment which results from downturn in economic business cycle due to the
lack of aggregate demand for goods and services. This is also known as demand deficit
unemployment. The contractions in economic activities lead to less demand for skills of labour. For
example, a business may not be able to earn enough sales revenue due to a recession and can’t afford
to pay all of its workers. As a result, companies are likely to reduce employment to cut back their
expenses or maintain profit-also known as labour shedding or down-sizing.

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 CURRENT UNEMPLOYMENT SITUATION IN
BANGLADESH

Despite Bangladesh’s booming economic growth over the past decade, the rate of unemployment
hasn’t decreased proportionally which raised questions about the relevance of the growth observed for
a large scale of the population. In last year 2020, the unemployment rate of Bangladesh was
approximately 4.18 percent. After a decline from 2010 to 2011, Bangladesh’s unemployment rate has
been stable at around 4.2 percent. Regardless of the higher economic growth in recent years, the
country has not been able to create available jobs specially for the rising youth population. The job
market is rather condensing due to the expanding capital-intensive industries taking over the existing
labour-intensive markets.

Title: Contrast between the Unemployment Rate (on the left) and the GDP growth rate in
Bangladesh for the past decade

According to a recent labour force survey (LFS), more than 6.6 million Bangladeshis who qualifies
for permanent jobs cannot be provided with any suitable employment opportunities. Also, it found out
that about 2.68 million individuals aged over 15 years are unreservedly workless.

The biggest obstacle that needs to be faced is the job creation. The LFS for 2017 manifests an
unemployment rate of 4.2% (male unemployment rate was 3.1% whereas for female it was 6.7%)
which has been relatively steady since. Moreover, the youth unemployment rate (aged 15-24) detected
was staggeringly high at 12.3% which accounted 10.1% for male and 16.8% for females.

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Furthermore, the long-term unemployment rate was inflated at 15.2% which was 13.7% and 16.7%
for males and females respectively.

The inactivity rate in Bangladesh (which consists of the proportion of the working age population not
participating in the labour force) is significantly excessive juxtaposed to other nations worldwide. The
inactivity rate has reached a lurching 41.8% in total which comprises of 19.5% for male individuals
and 63.7% for females respectively. In most countries, the male inactivity rate remains close to 7%
whereas in very remote areas (e.g., countries in North Africa) the female inactivity rate reaches as
high as 50%.

What is even more confounding is that according to the LBS in 2017, the unemployment rate of
individuals who have successfully completed their secondary level education was high as 29.8% and
13.4% was measured for those individuals who have fulfilled their tertiary education. This regrettably
infers that in our country the unemployment is actually higher for the educated, knowledgeable &
intellectual individuals compared to those who are much less schooled.

According to the Bangladesh Bureau of statistics (BBS) survey, the rural areas have 1.82 million
unemployed people which is more than double the number of unemployed individuals in the urban
area, 0.77 million. As the population ratio of urban-rural is 30:70, this clearly illustrates the region
and sector that entails to be focused on. Moreover, unlike many western societies where state benefits
are issued to all unemployed individuals, jobless individuals in Bangladesh are not entitled to such
compensation and social security supports. Thus, according to analysts the unemployed population
should be way higher than what was found in the survey conducted which will likely make the
existing condition worse.

Though most of the graduates are from generic region, only a few of them are from technical
background. Hence, there is a significant shortage of skilled manpower and technical experts which
resulted individuals being hired from foreign platforms every year; as our domestic labour force is
deprived of the potential technical and managerial skilled manpower. However, our graduates can be
deployed in these fields after proffering proper technical training opportunities. Though many local
universities conduct several technical subjects, there has been always a lack of practical
implementations. This consecutive low quality of education narrows down the imminent employment
opportunities for the fresh graduates along with ensuing a large group of unproductive youths facing
difficulties in the employment of informal sectors such as agriculture, manufacturing, constructions
etc. So, initiatives have to be implemented to do something new and change the trend of our
employment system.

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 CURRENT SITUATION RELATING GENDER AND
UNEMPLOYMENT

According to a government study conducted on employment, productivity & sectoral investment in

2018, the female participation rate has shrunk considerably in the past decade, specifically in the rural
areas. The report revealed that the gender discrimination in Bangladesh was evident and striking, with
young women composing the predominance of the unemployed young NEETs (who are neither in
employment, education nor training). In fact, more young women than young men are observed to be
in vulnerable employment. Moreover, 80% of young women are not in the labour force and two-thirds
of young women are not included in the employment education or training. Furthermore, two-thirds of
school drop outs are women.

Therefore, a major hindrance in the growth process has been the constant loss of female participation
in the employment sector. By all metrics, their involvement in the economy was lower in 2018 than in
2010. Weaker growth of labour demand tends to effect female individuals significantly more than
males. This is because instead of continuing to actively seeking work, demoralized female labour
seems to opt out of the labour market. Moreover, the number of females who were unemployed rise to
1.2 million in 2018 from 1 million in 2010. Furthermore, in rural areas 12.6 million females were
employed in 2010 which fell to 11.6 million in 2018. The study proposed a proper employment
approach to be implemented for stimulating female participation in the labour force.

Despite 2 million individuals joining the labour force each year, there remains a significant gap
between the skills constructed by the educational institutions and the skills demanded in the industry.
Hence, the industrial employment increased from 12.1 million in 2010 to only 13.1 million in 2018
which is just a million increase in 8 years despite the average industrial growth rate of 9.6% during
2010-2018. Factors like low investment growth, rapid capital-intensive production process, spread of
automation etc played significant role for the weak growth in labour demand.

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 EFFECTS OF UNEMPLOYMENT

As mentioned earlier, the costs of unemployment are not limited to micro range. In fact, there are
costs to government, cost to society at large along with costs to respective individuals. The economic
and social & individual demerits of unemployment are listed below:

PERSONAL COSTS OF UNEMPLOYMENT

Loss of earnings to the unemployed: One of the major causes of poverty in our country is due to
unemployment. Elongated periods of unemployment can increase the debt-to-income ratio for
households and hence increase the rate of relative poverty. Many families will be left with insufficient
income to meet their daily needs. This will likely lead to indebtedness from more borrowings; or even
homelessness if individuals are unable to find suitable sources of finance. As a result, prolonged
periods of unemployment are often seen in correlation with rising rates of homelessness.

Harms future prospects: Low rates of unemployment makes it more difficult to make recruitments
and retentions. As those who are unemployed often finds it troublesome to get work in the future
known as the hysteresis effect. Moreover, if individuals are out of work, they miss out the training
from job which tends to provide individuals with human capital and labour skills. As a result, high
rates of unemployment can certainly decrease labour productivity. Furthermore, being unemployed
for considerable amount of time can affect the confidence and demoralizes individuals making them
less employable in the future.

Unemployment and depression/mental health: There are stress and health problems associated
with being unemployed. Amongst multiple studies of unemployed men, there has been highly
noticeable signs of depression, mental anxiety, and health problems Also, recent surveys reported that
common effects of unemployment include depression, substance abuse, admissions to psychiatric
hospitals, death by suicide, and violence.

COSTS OF UNEMPLOYMENT TO GOVERNMENT

Increased government borrowing and less tax revenue generated: Higher unemployment generally
leads to a fall in tax revenue because there are fewer people available to pay taxes and also less
consumer expenditures. Moreover, the fall in tax revenue which is a major source of public saving
will decline resulting the government to borrow from third parties if a budget deficit occurs. The
higher borrowing by the government can increase debt ratio making the economic situation worse off.

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COSTS OF UNEMPLOYMENT TO SOCIETY

Lower GDP for the economy: High unemployment implies that the economy is functioning below
its full potential and is becoming inefficient which substantially leads to lower output and incomes.
Moreover, the unemployed individuals will also be unable to purchase as many goods and services
which will promote to less spending and lower output. A rise in unemployment can create a vicious
cycle contributing to less GDP generated for the nation.

Increase in social problems: According to recent surveys, the areas with high unemployment rates
(especially consisting of youth unemployment) is prone to more crime and vandalism. It can result in
alienation and difficulties in integrating, socializing and culturing young unemployed people into
society. Often when individuals are impotent to earn incomes legally to feed their families, they may
choose unlawful ways procuring violent activities turning themselves into criminals to meet their
economic needs.

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RECOMMENDATIONS:

STEPS TO REDUCE UNEMPLOYMENT/SOLUTIONS OF

UNEMPLOYMENT

In our nation, generating more and better-quality jobs will necessitate two major economic
modifications: firstly, to shift workers from lower to higher productivity pursuits; and secondly
ubiquitous transformation with urbanisation which would enable villagers to advance into secondary
towns and cities. However, these changes will have to be guided by the private sector as it serves as
the principal driving force of job growth in Bangladesh. Also, for this to transpire on an extensive
extent, we need to focus upon the factors which has worked best to develop jobs, concentrating on
sectors that have the highest prospective.

Agriculture sector: Today agricultural sector still accounts for about 41% of total employment in
Bangladesh. The main issue concerned for this system would be to create high value-added jobs
across the value chain mainly for the youth and women. This can be achieved through the rising
agricultural productivity along with a shift towards commercial crops which will enable to provide the
propulsion necessary for economic growth, higher income, job creations and the expansion of
downstream industries. Also, strategies need to be implemented for utilising agriculture to such extent
that would stimulate job creation and raise demand. For example, policy measures to upgrade
technology, improve skills, ensuring supply of essential raw materials etc would be imperative for
successful transition of the agricultural to increase employment.

Micro, small and medium enterprises: Factoring out the agricultural sector, there are more than 34
million self-account and voluntary family workers in Bangladesh, which constitutes 56% of our
workforce. The micro, small and medium enterprises (MSMEs) established by these seif employed
individuals have great possibilities for rapidly producing huge numbers of new suitable jobs along
with proliferating productivity for the economy provided right policy measures are in place to support
them. For example, policies should be kept in place for easy financing for promising development
ideas, training, accessible marketing and distribution channels, researching institutes etc. The build-up
of numerous propitious financial institutions would cater the needs of the self-employed and small
firms can be especially effective in providing employment opportunities.

Change in education system: The educational system needs to be systematically rearranged along
with bringing up significant changes as necessary. Students who are interested for higher studies
should be admitted in colleges and universities at affordable costs. Attention should also be

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concentrated on vocational education. For example, qualified engineers should be able to start-up their
own small units. Moreover, primary and secondary education should be prioritized especially in rural
areas. These strategies have the potential to improve the productivity of the workforce; succours to
stimulate income equality; strengthen consumer spending power; and provide strong foundation for
high growth and pro-business policies. Consequently, the local universities and other educational
institutions need to edify high-tech science and digital media giving prominence to practical
implementations as their demand is increasing universally. Moreover, to put up with fourth industrial
revolution, the graduates should be digitally upskilled via increasing internet comprehensibility
(through short-term and media-based education) as it unlocks the global job opportunities. The
education system should succour to meliorate the complications of the educated unemployment
through altering the type of knowledge and skills required.

Participation of women in workforce: Proper employment strategies needs to be executed for

advancing female participation in the labour force. Along with eliminating barriers to female labour
participation force, equal opportunities need to be opened up. As women are often exposed to
violence, laws and legislations needs to be made severe and uncompromising. Moreover, along with
the development of infrastructures, childcare facilities at workplaces, increase in entrance to education
and training, accessibility of maternity leave and growth of industries where large proportion of
women are involved will succour better available opportunities. Furthermore, enactment of laws is
mandatory to ensure desirable working environment for women which will subsequentially lead to
better wages and higher status of women at the workplace promoting higher female labour force.

More importance to employment programmes: More prominence should be given to government

funded employment initiatives. The programmes directed to meliorating conditions like irrigation,
roads, flood control, power, agriculture, rural electrification have the potential to offer better
employment opportunities to people. Along with this, the population growth should be also studied &
checked in order to resolve further unemployment complications. For example, family planning
programme should be effectuated comprehensively and effectively.

Reduce corruption and red-tape: Young people who are among the most intellectual and diligent
(the best two predictors of business success according to behavioural research) are naturally
unenthusiastic to start a business in Bangladesh, fearing corruption and other related issues like
bribery payments. Moreover, their reluctant action is completely justified as merit-wise they do have
the potential succeed in just about any other country in the world where corruption does not play such
a huge role in daily lives. Thus, lowering corruption would encourage meritorious individuals to start
and settle up their own business in home country enabling employment opportunities.

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Lastly, without the support assistance from families & society at large, it is extremely difficult for
young people to seek the courageous path of discovering something new and momentous, which
could eventually have a surging net positive effect on society, including on the road to providing new
employment opportunities. As more than 50% of the population is young in Bangladesh juxtaposed to
mere 20-25% in western societies like Europe, the future driver of opportunities is the young
population that our nation is endowed with. So, all contributors have to take their share of onuses to
give them the right sense of direction; the large youth population of the nation has to be facilitated
with proper set of skills to make them employable in the fast-changing job market.

CONCLUSION

The truth of the matter is that there is no one “best” approach that can be followed to reduce
unemployment in the economy. Moreover, to get the best possible upshot, what is crucial is the
implementation of different initiatives that, when combined together, can connect and create net
positive productive outcomes when it comes to triggering more job opportunities, especially for our
young people. However, what is certain is that whosoever fails to respond quickly to the demands of
our changing times will eventually get left behind. Hence, it is up to us and our policymakers to make
the preference of not falling into that segment by being proactive in our actions and to endeavour and
make the most of the opportunities that are accessible.

The employment objectives should be high on the state agenda and an extensive plan to be entailed in
order to identify and ameliorate the untapped growth potentials sectors and unproductive segments in
economy. With a meticulous approach, right mix of policies, righteous government, a propitious
international environment for trade, improved technology advancement and sustainable investment,
Bangladesh should be able to meet the employment needs of all its people in near future.

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 REFERENCES

1. “Unemployment still a key challenge” by Shahiduzzaman Khan

https://thefinancialexpress.com.bd/views/unemployment-still-a-key-challenge-1585151594

2. “High growth, fewer jobs” by Rejaul Karim Byron

https://www.thedailystar.net/frontpage/news/high-growth-fewer-jobs-1786315

3. “Youth unemployment a big problem for Bangladesh” by Kayes Sohel

https://www.dhakatribune.com/uncategorized/2015/10/13/youth-unemployment-a-big-
problem-for-bangladesh

4. “Unemployment a big problem for Bangladesh” by Rayhan Ahmed Topader

http://www.theindependentbd.com/printversion/details/141035

5. “Sufferings and solutions of unemployment” by Mushfique Wadud

https://en.prothomalo.com/opinion/Sufferings-and-solutions-of-unemployment

6. “Poverty is linked with unemployment” by Md. Muzibur Rahman

http://www.theindependentbd.com/post/241549

7. CHART 1: “Unemployment rate in Bangladesh”

https://tradingeconomics.com/embed/?embed?embed-
survey.png&s=bangladeshur&v=201707031755v&h=300&w=600&ref=/bangladesh/unemplo
yment-rate

8. CHART 2: “Bangladesh GDP annual growth rate”

https://tradingeconomics.com/bangladesh/gdp-growth-annual?user=analyst35099

THE END

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