Effects of Foreign Direct Investment and Human Capital Formation on Labor Market in Manufacturing Sector in Bangladesh
Multinational enterprise has the conviction of the concept of globalization is a pictogram of centrifugal process thus MNC always eager to exploit the multitudinous opportunities to disseminate their competitiveness all over the world. For ensuring the competitiveness MNC provides the training to the employees of the host country to acquit about the modern technology and transform the workforce’s adroit and incessant progression and engaging continuous innovation and advancement that always cumulating the demand of the skill work forces because there is tapered supply of skill workforces. We make an attempt to assessing the effect of foreign direct investment and human capital formation on labor markets in Bangladesh. We mainly use panel data for 1,689 firms to accomplish the tasks and the tenure is from 2000 to 2014. We observe that FDI which accumulate the wage inequality. We also observe that skill-biased technological changes proliferates wage inequalities. A better framework needs to undertaken and addressing the crisis and strengthen the capabilities of the labor forces and deplete the wage inequalities.