Effect of Export Growth in Ready-made Garments and a Schooling Subsidy on Women in Bangladesh

Project Summary

Bangladeshi society is characterized by conservative gender norms, but recent industrial development has created economic opportunities for women.  In collaboration with Rachel Heath (U. Washington), this project examines the role of two developments in particular: the rapid expansion of the ready-made garments export industry and a subsidy of secondary schooling for girls.  The research survey examines 1400 households in the outskirts of Dhaka, collecting detailed work and schooling histories and measuring female autonomy and marriage and fertility outcomes.  Some of the garment workers in the sample work in the export processing zone, which also allows the researchers to examine whether government spending aimed to entice companies into an Export Processing Zone translates into better wages and conditions for its citizens.

The first aspect of the project focuses on the short-run effects of a holding a job and being able to control resources within the household, as well as the long-run impacts of a job in the garment industry on the woman’s timing of marriage, choice of partner, fertility timing, and number of children.  The second element seeks to understand the trend of garment factories to hire new employees through referrals from current workers—whether it be to economize on search costs or to identify and hire better workers.  The research looks at detailed work histories to asses the job performance of employees hired through different methods, as well as information on referrers and referees, in order to identify whether workers in the same family network have similar skills or motivation and whether firms prefer to assign workers of the same family network to work in close contact with one another.  Understanding why referrals are beneficial to the employer is important for designing policies that ensure that the relatively well-paying garment jobs are fairly accessible to all qualified workers, as opposed to being concentrated in certain privileged social networks.

Bangladesh has subsidized female secondary school enrollment since the early 1990s. Educational attainment among females has increased rapidly as a result (from 22 percent in 1986 to 42 percent in 2007 according to UNICEF, and the rate now surpasses male education). A collaborative project with Toan Do (World Bank) seeks to understand the  medium and long-term consequences of this shift on female labor force participation, and marriage and fertility outcomes. Since the program was gradually phased-in over the area studied, the outcomes for a girl of school-age just before the program began can be compared to her younger sister (or to another girl in the same village) in school just after program implementation, in order to isolate the effect of the schooling subsidy from other coincident social and economic changes.  Since girls only receive the stipend if they remain unmarried, analysis will begin by testing whether the program indeed increased age at marriage and decreased fertility.  The project will then explore subsequent marriages, including the quality of the match, the husband’s characteristics, and dowry payments.  This research can both address the economic theory that predicts that in general equilibrium, a large-scale intervention benefiting all females may not affect match quality at all, as well as explore the important policy question about the returns to education in the garment industry and other sectors.

Research Partners:

  • Toan Do (World Bank), Rachel Heath (U. of Washington)
  • Survey Firm – Mitra and Associates

Research Papers

  • R. Heath and A. M. Mobarak, “Manufacturing Growth and the Lives of Bangladeshi Women”, Journal of Development Economics, 155: 1-15 (July 2015) [Lead Article]

    Abstract: We study the effects of explosive growth in the Bangladeshi ready-made garments industry on the lives on Bangladeshi women. We compare the marriage, childbearing, school enrollment and employment decisions of women who gain greater access to garment sector jobs to women living further away from factories, to years before the factories arrive close to some villages, and to the marriage and enrollment decisions of their male siblings. Girls exposed to the garment sector delay marriage and childbirth. This stems from (a) young girls becoming more likely to be enrolled in school after garment jobs (which reward literacy and numeracy) arrive, and (b) older girls becoming more likely to be employed outside the home in garment-proximate villages. The demand for education generated through manufacturing growth appears to have a much larger effect on female educational attainment compared to a large-scale government conditional cash transfer program to encourage female schooling.

Press & Blog Coverage

  • How to encourage girls to school?  Aid or industry (Chris Blattman)
  • Industrialisation and Female Empowerment: Evidence From The Bangladeshi Garments Sector (Social Europe Journal)
  • Stitching together the future: the effects of the garment industry on girls’ schooling in Bangladesh (Rachel Heath via World Bank Blog)
  • Why Manufacturing can be an Effective Tool for Gender Empowerment (Live Mint & The Wall Street Journal)
  • Garment Factories, Changing Women’s Roles in Poor Countries (NY Times)
  • Bangladesh, With Low Pay, Moves In on China (NY Times)
  • How to keep more girls in school? Lessons from Bangladesh (Ideas for India)
  • Female Empowerment in the Bangladeshi Garment Industry (IGC)