Health and productivity of small and medium industrial enterprise (smie) workers: the case of Bangladesh

Abstract

Small and medium manufacturing industries (SMIEs) have significant contribution in terms of employment creation and share of GDP in the economy of Bangladesh.Evidence shows that workers of SMIEs usually work and live in unsafe, unhygienic and unhealthy conditions.As a result, the workers’ are exposed to illness and disability whichlead to a productivity loss of the worker. Therefore, the study seeks to assess the relationship of health with the productivity of SMIE workers in Bangladesh.The specific objectives we like to investigate are: i. To examine the relationship between health and productivity of SMIE workers ii. To find out the association between wages and productivity of SMIE workers iii. To estimate their income and expenditure on health iv. To observe the disease pattern and health care seeking behavior of SMIE workers v. To examine the health and working and residential environment of SMIE workers vi. To discuss the wage determination system of SMIE workers vii. To examine the impact of illness of SMIE workers on their productivity viii. To estimate and monetize the lost productivity of the selected SMIEs and the total SMIE sector due to illness of worker and its importance in the whole economy. A combination of qualitative and quantitative research technique is used to carry out the study. The study interviewed 259 workers and 44 owners/managers from selected 44 SMIEs which are located in three divisions like Dhaka, Chittagong and Khulna in Bangladesh. The workers and managers were interviewed by using two sets of questionnaire, one for the workers and another for the managers. It is found that SMIE workers are mostly below middle aged, married, Muslims, less educated and inexperienced. A good health of SMIE workers is found to have a significant positive impact on workers' productivity by both literally and empirically. The regression finding suggests that decrease in 1 absent day due to illness increases worker’s productivity by 94. 52 unitsand a 1 unit increase in BMI (ill health to good health) increases worker’s productivity by 318.16 units. The studyreveals that labor productivity and wages are positively related; sometimes higher productivity determines higher wages and sometimes higher wages leads to higher productivity. It is estimated that a 1 unit increase in labor productivity increase the wage by 0.28 units from workers’ response and by 0.19 units from managers’ response. On the other hand, a 1 unit increase in wage increases the labor productivity by 1.34 units from workers’ response and by 1.52 units from managers’ response. The study identifies a significant wage-productivity gap of SMIE workers. It finds that insufficient expenditure on health care is a cause of depleted health stock of SMIE workersindicating a 1 unit increase in health care expenditure (insufficient amount to sufficient amount) reduces the ill days of worker by 1.026 units. It is apparent that most of the SMIE workers mainly suffered from occupational asthma, bronchitis, allergic rhinitis, low back pain, anemia, fever, typhoid, headache and diarrhea. The SMIE workers usually seek treatment from pharmacy based doctor, kabiraj/hekim, and paramedics. It is evident that working and residential environment of SMIE worker have considerable impact on workers’ health. The average absenteeism rate due to illness of the SMIE workers is found 7.3 %. It estimates that the workers annually miss 22 work days due to their illness. Monthly mean lost productivity of SMIE worker due to their illness is estimated Tk 413 to Tk 708 from workers’ response and Tk 466 to Tk 739 from managers’ response based on wage and output respectively. This lost productivity is found as 4% to 7% of average productivity from workers’ response and 6% to 9% from managers’ response. Monthly mean lost productivity of total SMIEs in Bangladesh is estimated as Tk 19.44 crore to Tk 33.13 crore from workers’ response and Tk 19.81 crore to Tk 31.38 crore from managers’ response.This lost productivity of total SMIE sector is estimated as 0.05% to 0.09% of GDP, 2.5% to 4.2% of health sector’s total budget and 0.12% to 0.20% of national total budget. Due to unavailability of most recent data, the study uses SMIE data available in the report on survey of manufacturing industries 2005-2006 but it collects the data on productivity of SMIEs workers in the year 2012-2013. Because of this time lag our estimated lost productivity of total SMIE sector is undoubtedly underestimated. The underlying reason for this is that during this time gap both the number and employment of SMIEs increased manifold in the presence of government promotional policies.