Ready made garments industry: Informing policy with evidence based research

The International Growth Centre (IGC) and BRAC Institute of Governance and Development, BRAC University (BIGD) jointly hosted a seminar on ‘Ready made Garments Industry: Informing Policy with Evidence based Research’ on the afternoon of 17 July 2016 at Ikebana, Lakeshore Hotel, Dhaka. The half day seminar presented findings from two research papers on the ready made garments sector followed by in depth discussion on policy issues facing the industry in Bangladesh.

Two presentations were made in the seminar: ‘Growth in Garment Sector Jobs, and Impacts on Education’ by Professor Mushfiq Mobarak (Yale University; Lead Academic, IGC Bangladesh) and ‘Soft skills training for garment workers in India: A Randomized Evaluation’ by Achyuta Adhvaryu (Assistant Professor of Business Economics and Public Policy, University of Michigan). Dr. Sultan Hafeez Rahman, Country Director, IGC Bangladesh gave the opening remarks along with Prof. Wahiduddin Mahmud, Senior Advisor, IGC Bangladesh. Dr. Rahman briefly introduced the flagship research activities of IGC in Bangladesh. Honourable Senior Secretary, Mr. Hedayatullah Al-Mamoon, Ministry of Commerce chaired the seminar. Mr. Nick Beresford, Deputy Country Director, UNDP was the discussant for the papers presented.

The seminar was attended by officials from government ministries, private sector including RMG buying houses, industry associations, development partners, researchers, academics, think tank etc.

Professor Mushfiq Mobarak presented his work with Rachel Heath studying the aggregate effects of manufacturing growth, where access to factory jobs in the garment industry has had a significant impact on girls’ outcomes (education, labour market participation, marriage etc.). The study investigated how much the enrollment probability of a girl living in a garment-proximate village increases relative to her brother with national factory growth, in comparison to that same sibling differential in a control village. Analysing the demand for education, they find that the demand for education generated through manufacturing growth appears to have a much larger effect on female educational attainment compared to a large-scale government conditional cash transfer program to encourage female schooling. This in turn shows that conducive policies to enhance industrial growth are vital not only for economic growth but may have far reaching implications – by improving welfare, empowerment and educational attainment of women. The presentation concluded that policy can affect demand-side factors and demand-side can be a cost-effective policy lever – telling parents about returns to education found to have large effects in Dominican Republic, India, Chile, Madagascar etc.

Achyuta Adhvaryu presented his work with Namrata Kala and Anant Nyshadham, studying the implications on management skills training for garments workers in India. There is growing consensus that “soft”(non-cognitive) skills – such as the ability to allocate resources (e.g., time and money) effectively, interpersonal skills, and the ability to acquire and use information – can account as much for long-term economic well–being as cognitive ability and schooling. But can these skills be taught to adults, and how persistent are the impacts? Using a randomized controlled trial with multi-level treatment randomization, the authors studied the direct and indirect spill over impacts of an in-depth soft skills training program aimed at empowering low-skilled female labourers in their personal lives and long-term career paths.

The authors partnered with a large Indian garment export firm and Gap Inc. to implement and evaluate the Gap’s flagship CSR program- Personal Advancement and Career Enhancement (P.A.C.E.). The training was developed to impart soft skills to empower female garment workers. It was intensive training programme: 2 hours/week (1h “own time,” 1h factory time) for 11 months and included broad based training modules on communication, time management, financial literacy, execution excellence, problem-solving and decision-making.

At the end of the programme, the authors find that P.A.C.E. had positive impacts on workplace outcomes including short-term retention and attendance gains which translate into longer-term promotion. There are substantial spillover effects in nearly every category of workplace assessment (validating experimental design). The authors found sizable spill over effects on labour supply, productivity, and career advancement for untreated workers who frequently worked closely with treated workers.

These positive externalities on labour supply and worker quality, though not the motivation for the training, more than pay for the cost of administering the program before the training is even complete.

It is possible to teach soft skills: survey results suggest stock of soft skills did actually increase as a result of the program. Survey results also help to corroborate productivity and career advancement impacts, showing positive effects on self-assessment relative to peers and participation in skill development and production award or incentive programs on the job.

Additional survey results show impacts on self-reported savings behaviour (particularly for children’s education) and utilisation of government and firm entitlement programmes (e.g., pension, subsidized healthcare and schooling, and subsidized housing).

Nick Beresford commented on the relevance formulation for the findings for RMG policy for Bangladesh. He said that it is critical that those formulating policies are thoughtful of the demand side factors that may come to play when a supply side policy intervention is introduced. He noted supply side interventions in social sector like health and education may fall flat if there is a lack of nudge from the demand side simultaneously. He noted that steady rate of job creation in the manufacturing sector boosted demand for education and that the results from P.A.C.E. training programme is very promising; he also noted that soft skills training may be equally important and relevant for growth of RMG sector in Bangladesh.

A vibrant discussion took place when the floor was opened to the audience for questions. Comments were received by Dr. Rabbani, Dhaka University and Ms. Miyata (IPA) on how the findings of the P.A.C.E. training programme converges with the findings of the IGC RMG operator training study- where training is enhances confidence and aspiration of female operators to move up successfully to supervisory roles.

The chair concluded the session by thanking the presenters and stressed that the government is keen to draw on evidence based rigorous research when formulating policies. He noted that government is keen to promote inclusive broad based economic growth and gender empowerment is a key issue in the growth agenda. He also noted that the RMG sector needs to maintain its competitive edge in the global market and the government is committed in providing the necessary support to enhance export led growth.

 

Representatives from the print media were invited selectively to the seminar. An news article was published in the Financial Express: http://www.thefinancialexpress-bd.com/2016/07/18/38571/Buyers-should-invest-more-for-RMG-workplace-safety