Studies

The Roles of Information and Search Frictions in Determining Working Conditions in Bangladesh’s Apparel Sector

In this project, BIGD will build on its previous research by experimentally investigating to what extent information and search frictions in Bangladesh’s labour market contribute to inefficient matching between workers and firms, and how these frictions interact with gender. Specifically, the study will implement a randomized controlled trial (RCT) with men and women who have recently begun working in Bangladesh’s garments sector. The study will provide information about job characteristics (wages and working conditions), job openings, or both, and then assess the impact of treatment on outcomes such as their beliefs about working conditions and wages in the garment sector, job search activity, and employment outcomes.

Researchers: Dr Laura Boudreau; Dr Rachel Heath; Md. Shakil Ahmed; Ratul Tanchangya; Md. Karimul Islam

Partners: G²LM|LIC

Timeline: 2022-2024

Status: Completed

Contact: Md. Shakil Ahmed; shakil.econ@bracu.ac.bd

Context

The emergence of low-skill manufacturing sectors in developing countries can increase labor market opportunities and provide other economic benefits for women (Heath and Mobarak, 2015; Tanaka, 2017). But in light of the poor conditions that characterize many low-skill manufacturing sectors, some researchers have questioned whether manufacturing jobs are actually better for workers than their alternatives (Blattman and Dercon, 2018; Blattman, Dercon, and Franklin, 2019). Recent research by the co-principal investigators (Co-PIs), Boudreau and Heath, provides evidence consistent with a model of information frictions around working conditions. Specifically, it shows that rural-to-urban migrants in Bangladesh begin their careers in factories with worse conditions compared to workers born locally, who arguably have better information about factories’ conditions. Over the course of their careers, migrant workers differentially move toward factories that provide better working conditions (Boudreau, Heath, and McCormick, 2019).

Objectives 

The project tests whether providing garment workers in Bangladesh with information about working conditions and/or vacancies in factories near them helps them find better jobs, and will suggest whether policies to alleviate information frictions can help to close gender gaps. This study will also contribute to a small body of literature that aims to estimate the Value of a Statistical Life (VSL) for populations in developing countries, by using an information intervention to estimate a VSL, and explicitly including both men and women.

This study is relevant to SDG 8 (decent work and economic growth), particularly promoting sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.

Methodology

Before the experimental intervention, BIGD will conduct a baseline survey in order to measure working conditions and wages across garments-related factories in local labor markets. The study will then recruit a geographically representative sample of garment workers with less than two years of experience from these same neighborhoods and implement a stratified cluster RCT that randomly assigns these workers to an experimental arm. The study will implement our interventions with treatment workers and follow up with all workers via mobile phone-based surveys.  

Findings and Recommendations

Forthcoming

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