Labour Market Effects of a Female Stipend Programme in Bangladesh

Bangladesh's female secondary education stipend programme was one of the first conditional cash transfer programmes in the world. While numerous studies have investigated the impacts of such programmes on school enrolment, attendance and learning, less attention has been paid to their long-term labour market effects. This article extends the literature by studying the effects of Bangladesh's programme on earnings and the sector of employment, as well as on labour force participation and education outcomes, using repeated cross-sectional data in a difference-in-difference framework. We find that exposure to 5 years of the programme is be associated with a 1-year increase in education level completed and an increase in female labour force participation by six percentage points. However, we find that wages decrease by about 17% because the women have difficulties in finding a good job and end up in low productivity self-employment work.” “The decrease in earnings among the beneficiaries raises concerns about the effectiveness of FESP to meet its long-term goal of empowering women and enhancing social benefits. The results suggest that in order for programmes like FESP to have beneficial long-term labour market impacts, it has to be combined with demand-side interventions. Policymakers in Bangladesh should focus on reducing bottlenecks, building infrastructure and attracting foreign investment, which will lead to more and better jobs for both males and females.
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