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Child labour is a common financial coping strategy in poor households, especially in low-and middle-income countries with many children working under hazardous conditions. Little is known about the linkages between hazardous work conditions and psycho-social and educational outcomes. We analysed the Bangladesh Multiple Indicator Cluster Survey (BMICS) round 6 to assess the association between the exposure variables, including child labour, hazardous child labour (HZCL) and hazardous work, and outcome variables, including psychosocial functioning difficulty and school dropout, in children aged 5 to 17 years. We conducted bivariable and multivariable analyses to examine the association. In the adjusted analyses, children engaged in HZCL had increased odds of psychosocial functioning difficulty (aOR: 1.41; 95% CI: 1.16–1.72) and school dropout (aOR: 5.65; 95% CI: 4.83–6.61) among 5–14-year-olds compared to children who did not engage in child labour and hazardous work. Other independent factors associated with psychosocial functioning difficulty and school dropout included being male, living in a deprived neighbourhood, being exposed to violent punishment, the caregiver's attitude towards physical punishment, the mother's functional difficulty and lower maternal education. The linkages between hazardous work and psychosocial functioning difficulty appear more prominent among children not in school. Further, the evidence on the relationship between hazardous work and school dropout is stronger among children with psychosocial functioning difficulty. Policies and programmes that target the most hazardous forms of work are likely to have the greatest benefits for children's mental health, social well-being and educational attainment. [ABSTRACT FROM AUTHOR]