Migration has been a major feature in Bangladesh’s recent history, and several studies have _directly_ measured and documented trends on internal migration implied by decreasing wage differences for similar workers across regions.<sup>9</sup> In this regard, migration statistics published by BBS based on the 2011 census is a valuable source providing information on the movement of workers across districts between 2001 and 2011. This data source does not fully cover our period of primary interest, 2005 to 2015, but the information is nonetheless informative and the best available.

According to BBS (2015), Dhaka was the most popular district for internal migration between 2001 and 2011. When moving from one region to another employment was one of the primary reasons. Since Dhaka has a large presence of the export-oriented RMG sector, it is not unusual that it attracted most migrants. After Dhaka, people prefer to migrate to districts near Dhaka, such as Gazipur and Narayanganj for similar reasons. According to the last round of Economic Census for Bangladesh, districts of Dhaka and Gazipur reported the highest number of declared employees in the garment sector in Dhaka division in 2013. During the same period, a good proportion of migrants settled in Chittagong division districts: Chittagong, Rangamati, Bandarban, Khagrachari, and Coxes’ Bazar. Chittagong district, in particular, attracts migrants due to prevalence of job opportunities in the RMG sector.

In contrast, cross-district mobility in India has been historically low as documented in several studies.<sup>10</sup> Given the higher degree of internal migration in Bangladesh than India, it is possible that labor market effects due to export shocks are more likely to dissipate countrywide over time. In the next section, we describe how we evaluate this hypothesis.

# 4. Estimation Data Set and Methodology

Our main dependent variables are average wages and informality probability. Average wage variable is measured in real _takas_ (normalized with the consumer price index). The informality variable is measured as probabilities at the sub-district level (rates).

To match the trade and labor market data, we use a concordance developed for the Bangladesh Standard Industrial Classification (BSIC). The structure of the BSIC 2001 is similar to the ISIC Rev.3. The structure of BSIC 2009 corresponds to ISIC Rev.4 with an additional division, 6 new groups, and 93 new classes to better correspond to Bangladeshi requirements. We link the BSIC 2001 with the BSIC 2009 and ISIC Rev.3.1 for further merging with the HSO–1988/92 trade classification used by the UN COMTRADE data.

The trade exposure index can be calculated on the basis of regions or industries as explained in the section on methodology. We consider a slightly modified exposure index calculated with only manufacturing industries, rather than all industries, to investigate if nonmanufacturing trade drove

> 9 According to UNDP (2012), Bangladesh’s urbanization rate stood at 3.03 percent over the period from 1975 to 2009—one of the highest in the world. A higher urbanization rate is indicative of greater internal migration or mobility for the country.

> 10 Limited labor mobility in India has been widely documented in the literature. Few key studies include Srivastava and McGee (1998); Singh (1998); Srivastava and Sasikumar (2003); Lusome and Bhagat (2006); and ZL Kone et al. (2018).

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