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; since then with an average yearly growth rate of 17 percent current employment in the RMG sector is over 3 million.
A notable feature of the RMG sector is that majority (85 percent) of garment workers are migrants; however, their distribution by source region is rather skewed. For instance, northern Bangladesh is one of the most poverty-stricken regions of Bangladesh where the poverty was 17 percent higher compared to the rest of the country in 2005, however, has the lowest participation rate in the garment industry. This trend of low participation rate of workers from northern Bangladesh is particularly puzzling, given the fact that the northern region is suffering from periodic floods and river erosion during the monsoon; cold spells during the winter, and seasonal deprivation and famine-like conditions during the lean season.
Gana Unnayan Kendra (GUK) a local NGO working in northern Bangladesh implemented a project titled “Reducing extreme poor by skills development on garments” (hereafter GUK-garments project). Under this project, GUK developed skills of interested young women and men of poor families on woven garments. Initially, GUK provided one month-long residential training on sewing machine operation for the selected candidates from their targeted beneficiary households. After completing the course, the trained beneficiary undertook an internship at a garments factory in the capital city for two months. With the training, internship, and support of GUK in partnership with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), each household graduates in 12 months with the possibility of securing a job within six months from selection.
GUK’s innovative Garment’s training and placement service has been developed to tackle the skill shortage at the garments sector while connecting the poverty pockets of Bangladesh. The special design of the programme has been effective for the poor households as the programme provides a stipend during the course of the training to compensate for the foregone income and an onsite internship facility to have a network and possibility of securing a job at the Garments factories.
This research evaluates the GUK Garments project with a randomised control trial (RCT) technique to understand the impact of the programme on household decisions and other social and economic outcomes. We introduced a training “plus” program for the apparel sector jobs offered to the poor, rural households in northwest Bangladesh, where we relaxed some of these constraints in a rigorous RCT setting. Analysing the program uptake demonstrated an interesting heterogeneity, where gender-specific social barriers, as well as risk and time preferences, play influential roles. Data from the follow-up surveys—six and eighteen months after the intervention—showed a statistically significant, persistent, and a large effect of the training program on employment when combined with an apprenticeship [on-the-job training (OJT)] or stipend component. We also found substantial income and remittance impacts, especially during the time of a seasonal shock, as well as a reduction in income poverty, both for the stipend and OJT groups. However, the rural household estimates—twelve months after the intervention—showed no impact on consumption poverty in the origin households.