Barriers to labor migration for the rural poor: Experimental evidence from a vocational training program in Bangladesh

• Main Authors: SHONCHOY, Abu S., FUJII, Tomoki, RAIHAN, Selim
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2018
• Subjects: Field Experiment; On-the-job Training; Bangladesh; Garment Industry; Rural; Extreme Poor; Asian Studies; Behavioral Economics; Labor Economics; Rural Sociology
• Online Access: https://ink.library.smu.edu.sg/soe_research/2798; https://ink.library.smu.edu.sg/context/soe_research/article/3797/viewcontent/Barrier_labor_migration_rural_poor_2018_wp.pdf
• Institution: Singapore Management University

Vocational training programs aimed at rapidly growing sectors have the potential to reduce skill gaps as well as improve income and employment possibilities. Such programs have often been unsuccessful because they are not driven by industry demand and market linkages. Also, they do not tackle other barriers faced by trainees, such as savings and credit constraints and the uncertainty of migration. We introduced a training "plus'' program for the apparel sector jobs offered to the poor, rural households in northern Bangladesh, where we relaxed some of these constraints in a rigorous Randomized Control Trial (RCT) setting. Analyzing 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.