Spatial Dimensions of Income Inequality and Poverty in Bangladesh: An Analysis of the 2005 and 2010 Household Income and Expenditure Survey Data

Using the 2005 and 2010 Household Income and Expenditure Survey (HIES) data, the paper examines income inequality and poverty in Bangladesh with a focus on their spatial dimensions (urban vs rural and across administrative divisions). It finds that disparities among administrative divisions are relatively small but urban inequalities deserve policy attention. Education plays an important role in increasing urban inequality; raising general education levels and expanding primary education access nationwide are recommended to reduce inequality and poverty. Wages and salaries help mitigate inequality, suggesting promotion of formal income-earning opportunities; agricultural productivity and promotion of non-agricultural activities according to comparative advantage are also advised. The paper suggests targeted transfers could modestly improve incomes of the poorest.