Wage inequality in Bangladesh, 2000–2010: an unconditional quantile regression decomposition

ABSTRACT

This paper reports on an investigation into changes in wage inequality in Bangladesh between 2000 and 2010, based on gender, marital status, education, job industry, job sector, location, etc. The 2000 and 2010 Labour Force Surveys conducted by the Bangladesh Bureau of Statistics (BBS) provided the data used. Oaxaca–Blinder’s (1973) decomposition and regression of the (recentered) influence function (RIF) model of Firpo–Fortin–Lemieux (FFL)’s (2007) decomposition were used to identify the important factors that caused wage inequality in Bangladesh. Both methods showed that the coefficient effect is the main contributor to the overall increase in wage inequality.

KEYWORDS:

• Wage inequality
• Oaxaca–Blinder decomposition
• FFL decomposition
• covariate effect
• coefficient effect

Acknowledgments

We would like to thank the TAOYAKA Program, Hiroshima University, Japan, for academic and financial support as well as for allowing our work to be part of this leading program. This program aims to create a flexible, enduring, and peaceful society.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. The government formed the National Pay and Services Commission which proposed the basic salary of civil servants in Bangladesh.

2. This method can perform detailed decomposition very much in the spirit of traditional decomposition for the mean.

3. The Bangladesh economy is now transforming to become services sector-oriented from being agriculture-dominant.

4. In Bangladesh, households will now be wealthier if the household has a smaller number of family members.

5. These sectors offer a high salary to employees who have technical knowledge and good experience.