Does Rural Transformation Reduce the Gender Wage Gap? An Empirical Study of Sustainable Development in Bangladesh

Abstract

This paper examines the impact of rural transformation on the gender wage gap in Bangladesh, utilizing longitudinal data from the Household Income and Expenditure Survey, covering all 64 districts across the years 1995, 2000, 2005, 2010, 2016, and 2022. Using Oaxaca–Blinder decomposition analysis and spatial autoregressive models with fixed effects, we analyze how shifts in rural economies, characterized by growth in high-value agricultural activities and nonfarm employment, are associated with changes in the gender wage gap. Results indicate a significant decline in the wage gap as rural areas transitioned to more diversified economies, with spatial effects revealing that rural transformation in one district can influence wage disparities in nearby districts. This study underscores the importance of addressing structural barriers, such as limited access to financial resources, markets, and agricultural inputs, as well as ongoing social and cultural restrictions that affect women's educational and employment opportunities. Aligned with Sustainable Development Goal (SDG) 5 (promoting gender equality) and SDG 10 (reducing inequalities), policy recommendations include enhancing women's access to credit, markets, and agricultural resources, investing in women's education, expanding nonagricultural employment opportunities, enforcing anti-discrimination legislation, and promoting gender equality awareness to foster inclusive development across rural Bangladesh. Show more