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Rural Labour Market Developments, Agricultural Productivity, and Real Wages in Bangladesh, 1950–2006

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  • Akhand Akhtar Hossain

    (University of Newcastle, Australia.)

Abstract

This paper provides an overview of recent developments in rural labour markets in Bangladesh and also examines the trends and movements of agricultural productivity and real wages with annual data for the period 1950–2006. The paper links the movements of agricultural real wages to macroeconomic developments in general and agricultural development in particular. As part of empirical investigation, the paper develops a simple model of agricultural real wages that depend on agricultural productivity. In order to examine the long-run relationship between agricultural productivity and real wages, the paper applies the Autoregressive Distributed Lag Bounds testing approach. Empirical results suggest that there exists a long-run relationship between agricultural productivity and real wages, and that agricultural productivity can be treated as a ‘long-run forcing variable’ in explaining agricultural real wages. In the dynamic specification of real wages, the coefficient on oneperiod lagged error-correction term bears the expected negative sign and is significant. The forecasting ability of the error correction model is satisfactory with respect to the level or the percentage change of real wages. The overall results are consistent with the findings of earlier studies that agricultural productivity is a key determinant of real wages in Bangladesh.

Suggested Citation

  • Akhand Akhtar Hossain, 2008. "Rural Labour Market Developments, Agricultural Productivity, and Real Wages in Bangladesh, 1950–2006," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(1), pages 89-114.
    • Handle: RePEc:pid:journl:v:47:y:2008:i:1:p:89-114
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    File URL: http://www.pide.org.pk/pdf/PDR/2008/Volume1/89-114.pdf
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    References listed on IDEAS

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    Cited by:

    1. Akhand Akhtar Hossain, 2009. "Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 12777.
    2. Ali Naqvi & Miriam Rehm, 2014. "A multi-agent model of a low income economy: simulating the distributional effects of natural disasters," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 9(2), pages 275-309, October.
    3. Md. Fuad Hassan & Lukas Kornher, 2022. "Farm wage and Rice Price dynamics in Bangladesh," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(1), pages 127-146, February.

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    Keywords

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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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