Small and Medium Enterprises (SMEs) play an important role in income and employment generation in local economies, and SMEs account for a large share of businesses in low and income countries (LMICs). SMEs in LMICs are concentrated in activities that are described as unorganized or unregistered, or non-institutional. These SMEs have limited access to financial…
Training, Financing, and Matching between Workers and Firms
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Growth and Formality: The Case of Bangladesh
The informal sector plays a significant role in many, if not all, low-income countries. Traditionally, as an economy grows, there would be a shift of informal workers to formal wage jobs. Yet, in recent years, many low-income countries have experienced substantial economic growth without dramatic formalisation of informal jobs. To better understand the relationship between…
Labour Markets in South Asia: Evidence and Policy Lessons
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Formal-Informal Labour Nexus and Bangladesh’s Growth
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The Formal-Informal Labour Nexus and Growth
Although employment in low-income countries (LICs) is strikingly concentrated in the informal sector, the contribution of this sub-economy to the larger economy is not well understood. The traditional view holds that labour markets are segmented; the informal sector provides subsistence income, or a pool of surplus labour for the formal sector, and will likely disappear…
Reducing Extreme Poverty through Skill Training for Industry Job Placement
Bangladesh has been experiencing remarkable growth in the ready-made garments (RMG) industries for the last three decades. It has become an integral and major part of Bangladesh’s economy, which contributes 13 percent of GDP and 75 percent of export earnings. For instance, in 1983 there were some forty thousand people employed in the RMG sector;…
Building Management Hierarchies for Growth in LICs
We evaluate the impact of and demand for mid-level management training in a group of garment factories in Bangladesh. Industry participants recognise that there exists a shortage of skills needed to fill in lower-level management positions. There are several reasons firms may fail to provide socially optimal levels of training, and the project is designed…