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

Rahman, Mustafizur and Al-Hasan, Md. (2018): Why is the relative preference for government jobs on the rise in Bangladesh? Evidence from labour force surveys.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Wage Differentials; Quantile Decomposition; Quantile Regression; Public Employment; Employment Benefits
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C21 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E20 - General; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J32 - Nonwage Labor Costs and Benefits ; Retirement Plans ; Private Pensions; J - Labor and Demographic Economics > J4 - Particular Labor Markets > J45 - Public Sector Labor Markets; P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P35 - Public Economics

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