The Gini Index suggests that income inequality is a highly prevalent phenomenon in Southeast Asia (The World Bank, 2012a). As Zaman and Akita (2012) points out, differentials in income is especially prominent in Bangladesh. Our article investigates which factors create differentials in income in Bangladesh. Using data from the Household Income Expenditure Survey published by the Bangladesh Bureau of Statistics, we estimated two separate models—one for daily wage and one for annual salary. We found that education, age (which was used as a proxy for labour market experience), gender and place of work significantly brought about differentials in daily wage rates. We also observed that all four of the above variables, along with different types of occupations, caused differentials in annual salary. We conclude by making several policy recommendations to address these findings.
AtlonjiJ.G.BlankR.M. (1999). Race and gender in the labour market. In Handbook of labor economics (vol. 3C, pp. 3143–3259). Amsterdam: Elsevier Science B.V.
BhattaraiK. (2000). Determinants of wages and labour supply in the UK. Universite de Nantes – Economie Internationale et de l’Entreprise (Papers 277).
4.
BirdsallN.RossD.SabotR. (1995). Inequality and growth reconsidered: Lessons from East Asia. World Bank Economic Review, 9(3), 477–508.
5.
BlinderA.S. (1973). Wage discrimination: Reduced form and structural estimates. The Journal of Human Resources, 8(4), 436–455.
6.
CardD. (1999). The causal effects of education on earnings. In Handbook of labor economics (vol. 3, pp. 1802–1859). Amsterdam: Elsevier Science B.V.
7.
DoughertyC.R.S.JimenezE. (1991). The specification of earnings functions: Tests and implications. Economics of Education Review, 10(2), 85–98.
8.
GreeneW. (2003). Econometric analysis. New Jersey: Pearson Education.
9.
GujaratiD.N. (2004). Basic econometrics. New York: Tata McGraw-Hill.
10.
HausmanJ.A. (1978). Specification tests in econometrics. Econometrica, 46(6), 1252–1271.
11.
HeckmanJ.J. (1979). Sample selection bias as a specification error. Econometrica, 47(1), 153–161.
12.
HeckmanJ.J.SedlacekG. (1985). Heterogeneity, aggregation and market wage functions: An empirical model of self-selection in the labour market. Journal of Political Economy, 93(6), 1077–1125.
13.
IslamI.KhanH. (1986). Spatial patterns of inequality and poverty in Indonesia. Bulletin of Indonesian Economic Studies, 22(2), 80–102.
14.
JaimW.HossainM. (2011). Women’s participation in agriculture in Bangladesh 1988–2008: Changes and determinants. In Dynamics of rural livelihoods and poverty in South Asia (pp. 1–16). Hanoi: Asian Society of Agricultural Economists.
15.
Kabubo-MariaraJ. (2003). Wage determination and the gender gap in Kenya: Any evidence of gender discrimination? AERC Research Paper132.
16.
KhanA.R. (2005). Measuring inequality and poverty in Bangladesh: An assessment of the survey data. The Bangladesh Development Studies, 31(3), 1–34.
17.
MincerJ. (1974). Schooling, experience, and earnings. New York: Columbia University Press.
OaxacaR. (1973). Male–female wage differentials in urban labor markets. International Economic Review, 14(3), 693–709.
20.
OsmaniS.R.SenB. (2011). Inequality in rural Bangladesh in the 2000s: Trends and causes. The Bangladesh Development Studies, 34(4), 1–36.
21.
PytlikováM. (2013). Reinvestigating the determinants of gender wage gap: Evidence from survey. Ostrava, Czech Republic: Technical University of Ostrava.
22.
SenB.AliZ. (2009). Spatial inequality in social progress in Bangladesh. The Bangladesh Development Studies, 32(2), 53–78.
23.
Statistics and Informatics Division. (2012). NSDS final draft. Dhaka: Ministry of Planning, Government of Bangladesh.
24.
The World Bank. (2011). Literacy rate, adult total (% of people ages 15 and above). Retrieved November2013, from The World Bank World Development Indicators: http://data.worldbank.org/indicator/SE.ADT.LITR.ZSaccessed on 15 February 2015.
WhiteH. (1980). A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica, 48(4), 817–838.
29.
ZamanK.A.AkitaT. (2012). Spatial dimensions of income inequality and poverty in Bangladesh: An analysis of 2005 and 2010 household income expenditure survey data. The Bangladesh Development Studies, 35(3), 19–51.
30.
ZamanH.NarayanA.KotikulaA. (2012). Are Bangladesh’s recent gains to poverty reduction different from the past. The Bangladesh Development Studies, 36(1), 1–26.
31.
ZhuY.WalkerI. (2003). Education, earnings and productivity: Recent UK evidence. Labour Market Trends, 111(3), 145.
