Rahman, Rushidan Islam
This thesis is concerned with two types of employment among poor rural women in
Bangladesh: wage employment and self employment.
For women in wage employment, the determinants of wage rates and the
amount of wage employment obtained are analysed. Existing theories of wage
determination do not adequately explain the variations in wage rates among female
wage workers. An alternative explanation in terms of a modified supply-demand
framework is developed. This framework explains the...[Show more] existence of
underemployment and the variations in wage rates in terms of the reservation wages
of these women. Empirical tests confirm the hypothesis that wage variations are
associated with factors influencing the reservation wages of women.
In the presence of underemployment in the villages, the amount of employment
was not influenced by supply considerations but was determined on the demand side.
The elasticity of employment with respect to wage rates was, however, low.
Therefore the amounts earned were not positively influenced by the acceptance of
In the absence of the availability of an unconstrained amount of market
employment at exogenously given wage rates, the amount of self employment was
determined by equating the productivity of such employment with the opportunity
cost of labour in housework. Self employment, therefore, was found to be influenced
by family responsibilities and by the amount of capital invested in an enterprise. The
latter influenced the productivity of self employment.
Self employment was financed by the Grameen Bank (a special financial
institution lending to landless households). The probability of becoming a Grameen
Bank member was not influenced by the landless women's initial resource endowment. The efficiency of resource use was not affected by a woman's family
situation or families' resource endowments.
Self employment activities were found to generate higher average rates of
return to labour than the average wage rates. Average employment and earnings were
also higher. The benefits of self employment were also indicated by the fact that the
Grameen Bank members had a larger number of meals and larger expenditure on
clothing than other landless women in the village.
These findings have important policy implications in terms of the expansion of
self employment opportunities. However, it has been noted that other direct and
indirect costs and benefits of lending to the very poor need to be researched before
policy conclusions are reached.
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