Earnings inequality and the changing nature of work: Evidence from Labour Force Survey data of Bangladesh

With structural changes in production coupled with technological progress, there have been shifts in modes of production and patterns of employment, with important consequences on task composition of occupations. This paper has utilized different rounds of Labour Force Survey data of Bangladesh and combined it with occupation network data of the United States along with its country-specific database and analysed the role of such factors on labour market outcomes. Our analysis shows a fall in the average routine intensity of tasks with no evidence of job polarization. We find a decline in earnings inequality where the decomposition analysis shows that earnings structure effect rather than characteristics effect plays a key role, with routine-task intensity of jobs and education explaining the majority of differences in earnings. Our analysis suggests that investing in education should be the highest priority, with greater emphasis on skill-biased training programmes, particularly those involving cognitive skill.