Gender gap in our labour markets is proving hard to transform. More women are in the labour force making relatively lower income. Extant forces, notably asymmetric sharing of house caring burden from adulthood to parenthood and market access barriers, mutate to keep disparities alive. They drag women's preparation for the labour market and impair their ability to compete as they revolve through the market over their life cycle.
Progress in female participation
Caveats on definitional consistencies over time aside, available official data show female labour force participation rate (FLFPR) has moved up with increases in per capita income (Figure-1). The level of real GNI per capita and FLFPR correlate strongly (0.93), but the correlation between changes in income and changes in participation is weak (0.31). Increased economic growth does not automatically map into greater presence of females in the labour market.
Bangladesh society has been more supportive of working women since inception. The diffusion of contraception, reduction in child morbidity, and increased public investments in female secondary education allowed women to control their lives better. Urbanisation and the expansion of readymade garments created employment opportunities for young women in manufacturing and services. Microfinance and targeted services through non-government organisations improved women's agency in income, saving, asset accumulation, entrepreneurship and business.
The impact of these changes are visible in Bangladesh's standing on gender inclusion relative to development peers. Bangladesh ranked higher than India and the South Asian average on UNDP's Gender Inequality Index 2023. According to the World Bank Enterprise Survey (2022), the inclusion of women in full time production workers is universal across sectors. The proportion of permanent full-time female workers in manufacturing (24.7%) is comparable to the Low Middle Income Country (LMIC) and South Asian averages. Large firms (36%) beat both the South Asian and LMIC averages on the proportion of permanent full-time female workers. Female labour in agriculture has been a pillar in keeping agricultural productivity comparable with other countries in Asia.
Wider gaps in earnings
There isn't a whole lot beneath the apparently not so bad looking surface of female labour participation. Working women earn less per month relative to working men. They allocate less time to work willy-nilly. Table below presents calculations on divergence from parity (defined as one minus the female to male ratio) over time in earnings per month and its two multiplicative constituents: hours per month and earnings per hour. The first measures the intensity of participation, the second the return. A positive number indicates women below parity and negative the reverse. You are warned not to take the numbers too literally because of some anomalous variations across surveys.
Some broad patterns are discernible. The gender gap in earnings per month increased from 12% in 2010 to 22% in 2022. Worldwide, women on average earn 20% less than men for comparable work. The observed increase in Bangladesh, a change in the wrong direction, is entirely due to an increased gap in hours per month. The reverse gender gap in earnings per hour shows inexplicable variations across surveys but disparity in returns to work looks less of an issue relative to disparity in participation intensity. Females make similar or even better pay per hour but do not get to work nearly as much as their male counterparts.
Note that women tend to spend a substantial amount of time on unpaid care work not regarded as "economically active" in labour market statistics. Less hours here refer to production related work for market or own consumption.
Increases in gender gaps in hours worked per week is not uncommon with rising incidence of participation (FLFPR) across the world. In virtually all cases, the participation effect dominates, so total utilisation of female work in labour markets (hours per female worker x number of female workers) increases. This happened in Bangladesh between 2016 and 2022—the share of female in total labour utilisation increased from 24% to 27% respectively (see table). Employment share increased faster than income share. This predominantly reflected 7.3 million additional female employment in own use production of goods. Female employment for pay or profit declined 0.9 million.
Female labour income share maintained dominance over employment share, but both are well below their better than 50% share in the working age population. Women are severely underrepresented in the labour market as in the rest of South Asia, the Middle East, and North Africa. Their representation is distinguished by an overarching 97% presence in informal work.
Progress on gender parity never automatic
Gender earnings gap transcend development differences across countries at any given point in time and within countries over time. The winner of the 2023 Nobel Prize in Economic Sciences, Claudia Goldin of Harvard University, uncovered the driving forces of labour market gender gaps across generations. Gender earnings gaps persist because of the influence of increasing demand for female labour due to technological progress; the growth of industry and services; and increased levels of education are limited by gender discriminatory social norms, legislation and other institutional barriers.
This story is pertinent to Bangladesh. The entry and utilisation of employed females are constrained both by asymmetric sharing of parenthood responsibility and barriers to market access with vertical and horizontal mobility once in. The parenthood effect is most evident in the age profile of employed females over time. Their numbers drop sharply at an early age in the bell-shaped distribution in Figure-2. The profile has remained unchanged over time except for an odd shift of the modal group from age 20 in 2013 to age 25 in 2016. It is odd because such a large shift within a span of just three years is inexplicable by demographic and economic changes. A more nuanced interpretation may be that more women are staying longer in the labour force than in the past.
It's all downhill once they exit employment. This has not changed over time. Most women exit the labour market upon parenthood, not marriage. Marriage causes school drop-out for girls. This has also been change proof. Today's female youth do not attend schools for the same reasons their grandmothers did 50 years ago. A 2016 brief by the World Bank surmised 59% of women aged 18-22 entered marriage before reaching their 18th birthday. These women were on average about 16 years old at the time of marriage. Returning to work after growing kids is distinguished by its absence because of hurdles arising out of break from work. Time away from and returning to the labour market at reduced hours has long-term consequences on the female wage-earnings profile.
Change is inherently slow
Household responsibilities may not be as inhibiting as they used to in the past but remain powerful deterrents to the incidence and intensity of women's labour market participation. Of the 46.3 million working population not in the labour force in 2022, 34.5 million were women. The gaps in working hours largely emerge and expand upon childbirth.
The perceived tradeoff between marriage prospects and women's education looks invariant to changes in labour market conditions. The longer a girl studies, the older she gets, and the lower the stock in the marriage market. The more educated a girl is, the more difficult it is to find a suitable groom for her. Early marriage is the only option if girls have neither education nor employment. The problem is compounded by the social expectation to have children soon after marriage.
Paid work, not an end in itself, is a critical anchor of women's agency. Work after marriage is not as unlikely to be attained as education. A working wife can be an earning asset for the husband's family. However, even when "permitted" to work, women have to adhere to gender norms which interfere with their participation intensity and career mobility. Women's workplace experience is dominated by patriarchal structures notwithstanding efforts to make the workplace women friendly.
Deeply founded occupational gender walls
Women presence in factories and offices pale compared to their presence in agriculture and domestic services where working hours are more flexible. Elite jobs such as owner, manager or white-collar worker are largely male domains. Only 4% of firms have females as top managers, compared with 11% in South Asia and 20% in LMICs. Female ownership is 6.7%, compared with 15% in South Asia.
The share of informality in female work occupations has increased over time. BBS's LFS shows the proportion of working women in predominantly informal "skilled" agriculture, forestry and fisheries increased from 44.5% in 2013 to 75% in 2022. Their share in craft and related trades declined from 23.7% in 2013 to 9.8% in 2022 and in plant and machine operators and assemblers decreased from 2.7% to 1% respectively.
The many sources of the gender gap such as human capital inequalities, intra-household discrimination, technological change, entry barriers and labour market glass ceilings often interact with one another. The speed of change is slowed by social norms and expectations. Education, matrimonial and parenthood decisions made when workers are young shape employment opportunities over the life cycle. Change occurs when new cohorts start making different decisions at a young age, unencumbered by societal barriers.
The unseen costs
Bangladesh is ahead on gender equity on de jure civil rights (right to vote for instance) relative to many contemporary nations in the Middle East and the currently rich Western nations less than a century ago. However, the unequal treatment of women in the labour market soaks the development gains from such a historical advantage. The gender dividend is surely the largest unseen demographic dividend Bangladesh is losing out on. Beyond gender equality in outcomes, such as education and labour, gender parity in social institutions matters nontrivially for economic and social development.