Who is more Likely to be Underutilised in the Labour Market of Bangladesh?

This paper examines the supply- and demand-side factors behind labour underutilisation in Bangladesh using the Quarterly Labour Force Survey 2022 data. A multivariate logit model was employed to analyse these factors. The study found that females and both younger and elders are more likely to face labour underutilisation. Being the household head reduces this likelihood while having children under 5 and disability increases it. The role of education and training in labour underutilisation appears to contradict the predictions of human capital theory. Rural and western region residents are more prone to underutilisation, highlighting the persistence of a dual economy. We found that individuals whose main source of family income is manufacturing or services experience lower underutilisation compared to agricultural income sources, while those relying on social protection schemes or remittances face higher underutilisation. Moreover, increased manufacturing employment and growth in non-agricultural employment in districts are associated with reduced underutilisation, indicating that structural transformation drives labour utilisation in Bangladesh.