MCC Limited Bangladesh Institute of Development Studies
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BIDS
Premier multi-disciplinary autonomous public research organization

Labor market study for skills for employment investment project (seip)

Bangladesh has made a remarkable success in achieving steady and persistent acceleration of growth over the last few decades, with about one percentage point increase in every decade since the 1980s. Average real GDP growth over the last five years has been above 6.5 percent, which is much higher than the average growth rate of all developing countries (4.7 percent). Recently, in the beginning of FY2015-16 per capita income of Bangladesh has crossed the threshold of USD 1,046 to become a lower-middle income country.  According to the Bangladesh Bureau of Statistics (BBS), per capita income is estimated at US$ $1,751 in FY2017-18. The economy now aspires to attain the high middle-income status by 2030, and developed country status by 2041. To this end, in addition to factor accumulation (capital and labor), the economy requires to upgrade the skill base of the labor force to enhance the productivity.  

It is argued that the contribution of productivity in the production process has been very low in Bangladesh. Almost 99 percent of the growth has been contributed by the accumulation of factors. The risk of growth relying solely on factor accumulation is that at one stage the diminishing marginal return of factors set in, which ultimately leads to a stagnation of growth. Though Bangladesh may be away from reaching the point of diminishing return, the country should consider improving the productivity of the labor force in order to maintain the high growth now and also to avoid ‘middle income trap’ in future.

The low level of skills and productivity of the Bangladeshi labor is endemic, as indicated by labor force survey data that more than 60% of the labor force has either no education (40%) or only up to primary level (23%). With the approval of the National Education Policy (NEP), 2010 and the National Skill Development Policy (NSDP), 2011, the government embarked on major education and training reforms. In 2014 the government of Bangladesh has initiated the Skills for Employment Investment Program (SEIP), a multi-tranche financing facility supported by the Asian Development Bank (ADB) and Swiss Agency for Development and Cooperation (SDC), anchored in the National Skills Development Policy (NSDP), 2011. Under first and second Tranches, 223,000 have been trained and certified with a job placement rate of nearly 70 percent. The combined training target under the first two Tranches is 502,000. Female participation among trainees is more than 30 percent.

In this backdrop, ADB has requested BIDS to conduct a study of the labor market for Skill for Employment Investment Project (SEIP) with the following objectives. 

OBJECTIVES OF THE ASSIGNMENT 

1. The main objective of assignment is to analyze labor supply and demand over the next 10-year period (2020-2030) in order to assist the government and the private industry to better plan the capacity and quality of skills training systems according to the evolving skills/trade/market demands from rapidly growing industry sectors.

2. The second objective of the assignment is to determine sector priorities, assess skills gap by sector, analyze sector-wise occupational composition of employment (including gender composition of employment), assess occupation-wise training requirement by sector and trade.

Team Composition for the study:

Study Director: Dr. Kazi  Iqbal

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