Development Issues of Labor, Agriculture and Poverty in Bangladesh
Saturday, Jan. 4, 2020 2:30 PM - 4:30 PM (PDT)
- Chair: Fahad Khalil, University of Washington
Multinational Enforcement of Labor Law: Experimental Evidence from Bangladesh’s Apparel Sector
AbstractWestern stakeholders are increasingly demanding that multinationals sourcing from developing countries be accountable for labor rights and working conditions upstream in their supply chains. In response, many multinationals privately enforce labor standards in these countries, but the effects of their interventions on local firms and workers are unknown. I partnered with a set of multinational retail and apparel firms to enforce local labor laws on their suppliers in Bangladesh. I implemented a randomized controlled trial with 84 Bangladeshi garment factories, randomly enforcing a mandate for worker-manager safety committees in 41 supplier establishments. The intervention significantly improves compliance with the labor law. It also has a small, positive effect on indicators of safety committees’ effectiveness, including measures of physical safety and awareness. Factories with better managerial practices drive these improvements. In contrast, factories with poor managerial practices do not improve compliance or safety, and in these factories, workers’ job satisfaction declines.
Sharing the Pie: Undernutrition, Intra-household Allocation, and Poverty
AbstractAnti-poverty policies often aim to reach poor individuals by targeting poor households. However, intra-household inequality may mean many poor individuals reside in non-poor households. Using Bangladeshi data, we first show that undernourished individuals are spread across the household per-capita expenditure distribution. We then quantify the extent of food and total consumption inequality within families. Based on a collective model, we develop a new methodology to compute individual-level poverty rates that account for intra-household inequality. We show that women, children, and the elderly face significant probabilities of living in poverty even in households with per-capita expenditure above the poverty threshold.
Why Do People Stay Poor?
AbstractThere are two views for why poverty persists. The poverty traps view emphasises how individuals with identical underlying parameters can end up with at different standards of living because they face unequal access to opportunities. The convergence view emphasises how individuals end up with different standards of living because they have the same opportunities but different underlying parameters. We use data collected for a randomised control trial of an asset transfer program on 23 thousand individuals from across the village wealth distribution and across four waves between 2007 and 2011 in Bangladesh to differentiate between these two views. We find evidence that is consistent with the poverty traps view. We identify a threshold level of capital such that individuals with initial capital below the threshold remain trapped in poverty whereas those above move beyond the poverty threshold and escape poverty. For individuals close to the poverty threshold the asset transfer is sufficient for them to successfully take on a new and more remunerative occupational activity (livestock rearing) whereas for those further away they fail to do this and fall back into poverty where they remain reliant on itinerant wage labor. We use data from control villages to show that: (i) there is a missing mass around the threshold; (ii) differences in individual productivity or random shocks to productive assets cannot explain the response to the program. We test three possible mechanisms underlying the trap - nutritional, behavioural, and technological and find evidence only for the last. We discuss the implications of having to cross a poverty threshold to escape poverty for anti-poverty policies.
- O1 - Economic Development
- J2 - Demand and Supply of Labor