Bangladesh NTA Project

Current Status and Future Plan

Bazlul Khondker and Moshiur Rahman
South Asian Network on Economic Modeling (SANEM)
Presented at NTA Asia Pacific Regional Workshop
December 3 and 4, 2015
Bangkok

Presentation Outline
Introduction of Bangladesh NTA
Demographic transition
Economic Growth and Structure
Key Features of Labor Market
Bangladesh NTA Profiles
NTA Gender Perspective
Some Estimates of First Demographic Dividend
Policy Recommendation
Future Plan

Introduction of Bangladesh NTA

Introduced to NTA in July, 2014 through attending the NTTA training
in Hawaii.
In November 2015, a preliminary NTA profile for 2010 has been
constructed and results presented in China NTA 10 Workshop
Received training in March-April 2015 to finalize the NTA 2010 profile
Bangladesh NTA 2010 has been finalized in September 2015
A paper on first demographic dividend has been prepared
An article on first demographic dividend in a popular daily will be
published this week
We have also identified future activities

Demographic transition
Demographic and Age Structure Transition in Bangladesh
CBR; CDR and population growth in Bangladesh

Demographic and Age Structure Transition in

Bangladesh

Population in thousand
Constructed from United Nations World Population Prospects: The 2012 Revision (United Nations 2012)

Crude birth rate

Crude death rate
Population growth rate

Constructed from United Nations World Population Prospects: The 2015 Revision (United Nations 2015)
2095-2100

2090-2095

2085-2090

2080-2085

2075-2080

2070-2075

2065-2070

2060-2065

2055-2060

2050-2055

2045-2050

2040-2045

2035-2040

2030-2035

2025-2030

2020-2025

2015-2020

2010-2015

2005-2010

2000-2005

1995-2000

1990-1995

1985-1990

1980-1985

1975-1980

1970-1975

1965-1970

1960-1965

1955-1960

1950-1955

Rate per 1000 population

60

50
2.40

40
2.00

30
1.60

1.20

20
0.80

0.40

10
0.00

-0.40

0
-0.80

% of population growth

CBR; CDR and population growth

3.60

3.20

2.80

GDP Growth Rates

Period

Sector GDP Growth Rates by Broad Sectors (% per year)

Agriculture
Manufacturing
service

1960-70 (average)
1972-90 (average)
1990-95(average)
1995-00(average)
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15

1.55
4.88
3.14
0.01
3.08
4.09
2.21
4.94
4.56
3.21
4.12
5.24
5.13
3.11
2.17
4.37
3.04

8.08
5.59
6.87
5.42
6.78
7.13
8.20
10.67
9.63
7.32
6.88
6.65
9.14
9.26
9.45
8.16
9.60

Bangladesh of Bureau Statistics; World Bank, calculations

4.43
5.29
6.00
5.93
5.83
6.13
6.72
6.72
6.80
6.38
6.22
6.42
6.27
6.37
6.17
5.62
5.83

GDP
Growth (%)
3.9
3.6
4.15
5.23
5.41
4.36
5.33
5.82
5.93
7.02
6.83
5.88
5.90
6.22
6.59
6.28
6.06
6.15
6.49

Structural transformation of Bangladesh Economy

60.00

Services

50.00

% of GDP

40.00

Industry
30.00
20.00

Agriculture
10.00
0.00
FY80 FY 82 FY 84 FY86 FY 88 FY 90 FY 92 FY 94 FY 96 FY 98 FY 00 FY 02 FY 04 FY 06 FY 11 FY 13

Bangladesh of Bureau Statistics

Key Features of Labor Market

Labor force participation rate in Bangladesh (%)
Percentage of employed Persons aged 15 Years and over by formal
and informal sector
Employment Sector Male and Female
Mean Wage

Labour Force Participation Rate

Both Sexes

1995-96

52

1999-00

54.9

2002-03

57.3

2005-06

58.5

2010

59.3

1995-96

87

Male

1999-00

84

2002-03

87.4

2005-06

86.8

2010

Female

1995-96
1999-00

2002-03
2005-06
2010

82.5
15.8
23.9
26.1
29.2
36

Labor force survey 1999-00, 2002-03, 2005-06 and 2010

Percent

Labour Force Participation Formal and Informal Sector

79.2

78.5

20.8

21.5

2002-03

2005-06
Formal Sector

Labor force survey 2002-03, 2005-06 and 2010

Informal Sector

87.4

12.6
2010

Employment Pattern (2010)

70
60
Percentage of Employment

57.24
50
40

47.37

45.31

Male
Female

30
25.51

20
17.26
10

7.32
0
Paid Employment

LFS 2010

Self_Employment

Unpaid Work

Mean wage (2010)

Mean Wage
1620

1600

Weakly mean wage In BDT

1580

1596
1582

1560
1540
1520
1500
1480

1471

1460
1440
1420
1400
Totoal

LFS 2010

Male

Female

Summary:
Population growth rate is declining. Demographic transition has been
happening fast with rising share of working age population and elderly.
GDP growth rate have been increasing with structural change in favour of
industry at the expense of agriculture. In fact, Bangladesh is one of rising
stars maintaining growth rate over 6% consistently during the 6/7 years.
Steady (moderate) economic growth and falling population growth lead to
sharp decline in poverty (reduced from 50% in 1990 to around 24% in
2015)
Attained lower middle income status
Major concerns:
Failure to create adequate decent jobs for the new entrant
Dominance of informal employment
Low female labour force participation

Bangladesh NTA 2010 Profiles

Data set for Bangladesh NTA
Per capita consumption profile, 2010
Per capita labor income profile, 2010
Per capita lifecycle deficit profile, 2010

Data set for Bangladesh NTA

Bangladesh NTA has been constructed for 2010. The data
sets for Bangladesh NTA include:
1. Household Income and Expenditure Survey (HIES), 2010
produced by the Bangladesh Bureau of Statistics (BBS);
2. Labor Force Survey (LFS), 2010 produced by the Bangladesh
Bureau of Statistics (BBS);
3. UNFPA population prospectus data; and
4. National Accounts Statistics (SNA), produced by the Bangladesh
Bureau of Statistics (BBS).

Per capita consumption profile, 2010

60000

Thousand Taka

50000
40000
30000
20000
10000

0
0-4

5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99
Age cohorts

Per capita labor income profile, 2010

120000

Thousand Taka

100000

80000

60000

40000

20000

0
0-4

5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99
Age cohort

Per capita lifecycle deficit profile, 2010

50000
40000

Thousand Taka

30000

20000
10000
0
0-4
-10000
-20000

-30000
-40000

5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99

Gender Perspective
Per Capita consumption and Income male and female
Per Capita Educational Expenditure male and female
Per Capita Health Expenditure male and female
Per Capita Other Expenditure male and female

Male-Female Per Capita Income and Consumption

160000

140000

100000

Consumption_Male
Income_Male

80000

Consumption_Female
60000

Incomme_Female

40000
20000
0
1
5
9
13
17
21
25
29
33
37
41
45
49
53
57
61
65
69
73
77
81
85
89
93
97

Thousand Taka

120000

Educational Expenditure Male and Female

8000
7000

Thousand taka

6000
5000
4000
3000
2000
1000
0

Education Exp - Male

Educcation_exp - Female

Health Expenditure Male and Female

Per capita Private health expenditure (Taka)
3500
3000

2000
1500
1000
500

25
28
31
34
37
40
43
46
49
52
55
58
61
64
67
70
73
76
79
82
85
88
91
94
97
100

22

16
19

13

7
10

0
1

Thousand Taka

2500

hex_pc_male

hex_pc_female

Other Expenditure Male and Female

Per Capita other private Expenditure (Taka)
35000
30000

20000
15000
10000
5000
0
1
4
7
10
13
16
19
22
25
28
31
34
37
40
43
46
49
52
55
58
61
64
67
70
73
76
79
82
85
88
91
94
97
100

Thousand Taka

25000

CFX_pc_male

CFX_pc_female

Demographic Dividend
7FYP set growth targets of 8% - relying on investment and exploiting
favourable age structure.
7FYP could not the express time of the window of opportunities by
observational confirmation.
Certain proof on the extent of the demographic dividend is needed to
formulate human resource and capital investment strategies to gather
the economic advantages of the population dividend.
Here we present observational confirmation on period and extent of
demographic dividend in Bangladesh. Analysis include:
Economic support ratio, based on NTA profile, 2010
Estimated first demographic dividend under various assumption of
population projection (8 variants)
Gender ESR

Economic support ratio, based on NTA profile, 2010

1.30
1.20
1.10
1.00
0.90
0.80

High Variant

Medium Variant

Low Variant

Economic support ratio, based on NTA profile,

2010
1.20
1.15
1.10

1.05
1.00
0.95
0.90
0.85
0.80

Constant Fertility

Constant Mortality

Instant Replacement

Economic support ratio, based on NTA profile,

2010
1.20
1.15
1.10
1.05
1.00
0.95
0.90
0.85
0.80

No Change

Zero Migration

Gender ESR
ESR_M

ESR_F

2.00
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Estimated first demographic dividend under various

assumption of population projections
Population with various
Year of Highest ESR
Range of First
Years left from 2015
Assumptions
Demographic
Fertility assumptions: convergence toward total fertility below replacement level
High Variant

2030

1990-2030

15

Medium Variant

2035

1990-2035

20

Low Variant

2040

1990-2040

25

Constant Fertility

2030

1990-2030

15

Instant Replacement

2030

1990-2030

15

Mortality assumptions
Constant Mortality

2040

1990-2040

25

Constant Fertility and Mortality assumption

No Change

2035

1990-2035

20

International migration assumptions

Zero Migration

2040

1990-2040

25

Will Bangladesh Miss out on First Dividend?

Comparison ESR estimates (table 1) against the classifications in table 6.1 GMR, it
may be argued that Bangladesh is inching towards the phase of late dividend.
Bangladesh should have implemented policies those were relevant for the early
phase of demographic dividend during 1990s. Bangladesh could not make
adequate investment for creating employment (i.e. investment as percent of GDP
has remained short by about 3 to 4 percentage points)and in human capital
including vocational and technical training (education investment 2% of GDP).
Very low female labour force participation (i.e. 36% in 2010 compared to 82%
male participation) envisaged existence of barriers to female labor force
participation.
Efforts to strengthen conditions conducive to savings and job creation found
insufficient a national saving rate of 30 % and underemployment rate of more
than 20 %.
Since Bangladesh did not take appropriate policies in the right time, Bangladesh
may miss out on first dividend.

Key Interventions for Reaping First Dividend

a. Higher investment (i.e. 3-4 percentage points higher) for creating
employment for new entrants. (7FYP priority)
b. Increased investment in education, training and human
development. (7FYP aims to increase 2.3% from current level 2% seems inadequate)
c. Vocational training and skills development should get priority and
adequate allocation. (7FYP calls for private sector involvement)
d. Enhancing female labor force participation including greater
opportunities for wage employment and self-employment.
a. Release of women from care activities
b. Stop Child Marriage
c. Secured and enabling working environment

Future Activity Plan

For 2016
Complete Disaggregation of NTA
Complete Gender analysis
The Economic security of older people using NTA
For 2017
Construction of NTTA from Time Use Survey 2012
Rural Urban pattern of NTA to capture rapid urbanization
Construction of Panel NTA profile (data 2005 and upcoming
2015)