Access to a telephone and factor market participation of rural households in Bangladesh

This paper assesses the impact of access to a telephone on rural households'factor market opportunities. It answers two questions. First, does the use of a telephone have any impact on rural households'factor market participation? Second, correcting for market participation, does the use of a telephone have any impact on the type of factor market participation? For the first question, the paper uses a bivariate probit to correct for omitted variable bias and for the second question, the paper uses a two-stage probit. The empirical findings suggest that access to a telephone has a significant positive impact on factor market participation. The difference in market participation between telephone users and non-users is around 14%. However, once a household participates in the market, the use of a telephone does not have any impact on specific factor market participation.