In the early hours of the morning, buses begin filling with workers travelling into Dhaka. Among them are thousands of women heading towards the garment factories that have become one of the defining features of Bangladesh’s economy. For many, the job is simple: sewing clothes for Western brands, often for long hours and relatively low wages. But economically, the decision to walk into a factory is far more significant than it appears.

For a country that was once overwhelmingly rural and agricultural, the rise of the garment industry gave millions of women something that had previously been scarce: a paid job outside the home. And in doing so, it began changing Bangladesh itself.

A paid job outside the home

Bangladesh’s ready-made garment industry emerged in the late 1970s and expanded rapidly through the following decades. Today, the country is the world’s second-largest garment exporter, with the industry generating around $40 billion in exports in the 2024 to 2025 financial year1. More than four million people work directly in the sector, the majority of them women2.

The obvious story is one of exports and economic growth. Before the garment industry expanded, employment opportunities for women were heavily concentrated in unpaid household work, agriculture and informal activities. Factory employment, on the other hand, offered a regular wage, an identifiable workplace and, importantly, income that women themselves earned. This brought a change to bargaining power.

A woman who earns an independent income has a different position within a household from someone entirely dependent on another family member. Her contribution to household spending becomes more visible, while her ability to make decisions over education, consumption and savings can increase. The garment industry therefore became more than an export strategy. It became a mechanism for moving women into the formal labour market. The effects further extended to girls who had not yet entered it.

The return to educating daughters

The emergence of factories created a new economic return to educating daughters. If a teenage girl could eventually leave her village, find a job and earn a wage, the opportunity cost of keeping her out of school changed. The World Bank has argued that the expansion of the garment industry helped increase demand for girls with basic education, reinforcing Bangladesh’s rapid expansion in female secondary-school participation3.

This is one of the less obvious ways labour markets can influence social outcomes. Education does not exist independently of the economy. Families respond to incentives. If schooling increases the opportunities available to a daughter, parents have a greater reason to invest in her education.

The same logic helps explain Bangladesh’s dramatic demographic transition. Fertility fell from almost seven children per woman in the early 1970s to around two today4. The decline cannot be attributed to garment employment alone. Family planning, education and wider social changes were also crucial. However, greater female employment formed part of a broader transformation in the economic role of women. The garment factory, in other words, did not simply employ women. It changed the calculation surrounding what women could do.

Rana Plaza

However, there is a darker side to this story. Bangladesh’s competitive advantage has historically depended partly on its enormous supply of low-cost labour. The very conditions that made the country attractive to global clothing companies also created pressure to keep wages and production costs low. That tension became impossible to ignore on 24 April 2013. Rana Plaza, an eight-storey building in Savar containing several garment factories, collapsed during the morning rush. 1,134 people died, most of them garment workers5. More than 2,500 others were injured.

The disaster exposed the weaknesses behind Bangladesh’s extraordinary export success. Global consumers were buying inexpensive clothes thousands of miles away, while the workers producing them were operating in buildings where basic safety standards had failed. The collapse forced a rethink of the industry.

The Accord on Fire and Building Safety was signed shortly afterwards, bringing together global brands, retailers and trade unions in a legally binding programme designed to improve factory safety6. Inspections, worker training and building remediation became much more prominent, while international pressure pushed manufacturers towards greater compliance.

The industry survived. More importantly, it continued to provide jobs. But the Rana Plaza disaster continues to raise an uncomfortable question about development. How much should poorer countries sacrifice in the pursuit of growth?

The answer is not as simple as rejecting low-paid manufacturing. For a worker with few alternatives, a poorly paid factory job can still represent an improvement over even less secure informal employment. The World Bank has found that apparel manufacturing can move women from agriculture and informal work into formal employment, providing one of the few accessible entry points into the labour market7.

This is an important distinction. A job can be exploitative and economically valuable at the same time. The objective of development should therefore not necessarily be to eliminate low-wage manufacturing before alternatives exist. It should be to make those jobs safer, more productive and eventually better paid, while allowing workers to move into more skilled employment. That transition is already becoming increasingly important for Bangladesh.

From jobs to careers

The garment industry’s employment growth has slowed8. Automation and higher productivity mean that the next stage of Bangladesh’s development cannot simply depend on employing more people to produce more clothes3. The challenge is moving from jobs to careers.

A recent programme aimed at promoting women into supervisory positions in Bangladeshi garment factories provides an interesting example. More than two-thirds of women completing the programme were promoted, while those promoted earned roughly 40% more. Factories also reported improvements in efficiency2.

Empowering women does not necessarily have to be a trade-off against productivity. Giving workers more responsibility and allowing women to move into management can improve both individual earnings and firm performance. That may be the next chapter of Bangladesh’s development story.

The country’s garment industry was successful partly because it found a huge pool of workers willing to perform relatively low-skilled manufacturing jobs for the global market. But its deeper achievement may have been creating a new relationship between women and the labour market. Millions of women entered factories because there was a wage waiting for them. Their daughters grew up in households where female employment was no longer unusual. Education became more valuable. Fertility fell. Household incomes rose. Evidently, this model isn’t perfect. Rana Plaza demonstrated the human cost of growth when institutions fail to keep pace with markets.

Overall, Bangladesh’s garment industry did not simply teach the world to buy its clothes but also helped teach a generation of women that they could earn their own income, enter the workforce and change the economic choices available to the generation after them. The next challenge is making sure that the women who sewed Bangladesh’s way into the global economy are not left behind as it tries to move beyond cheap labour.

Footnotes

  1. Bangladesh Garment Manufacturers and Exporters Association, Export Performance (opens in a new tab), 2026.

  2. International Finance Corporation and International Labour Organization, Creating Better Jobs for Women and Boosting Productivity in Bangladesh’s Garment Factories: An assessment of the Gender Equality and Returns Program (opens in a new tab), 24th April 2025. 2

  3. World Bank Blogs, How to provide opportunities for all? From girls’ education to women’s labor force participation in Bangladesh (opens in a new tab), 8th July 2021. 2

  4. World Bank, The World Bank in Bangladesh: Overview (opens in a new tab), 2026.

  5. International Labour Organization, Employment injury insurance in Bangladesh: bridging social security in cases of tragedy (opens in a new tab), 29th January 2024.

  6. International Labour Organization, Chronology of recent events in the Bangladesh Ready Made Garment (RMG) sector (opens in a new tab), 28th November 2013.

  7. World Bank, Toward New Sources of Competitiveness in Bangladesh (opens in a new tab), 2016.

  8. World Bank Group, Bangladesh: Country Private Sector Diagnostic (opens in a new tab), 1st May 2025.