The paper describes changes in the labour market during the first half of the 2000s
and identifies the key factors driving the growth in real wages seen over this period.
Labour force participation rates have remained relatively stable since 2000 although
there has been a continued, but gradual, shift away from what is seen to be low
productivity self-employment into more productive wage employment and nonagricultural
self-employment. Real incomes for wage employees have also grown
steadily between 2000 and 2005 and these increases are likely to explain in part the
declines in poverty described in the paper. What emerges most strongly from the
paper are the striking and consistent findings showing that women have made rapid
gains in the labour force. Women have moved out of low productivity and into higher
productivity occupations and their wages have grown considerably faster, leading to
a substantial narrowing of the gender wage gap. The paper shows that these
improvements have largely come about through increases in levels of education since
2000. However, improvements in education and wages have been concentrated
largely amongst richer women and hence the impact on poverty of these trends is
likely to be small. Extending good quality secondary education opportunities to poor
rural households has the potential of improving labour market outcomes further for
both male and female labour force participants.