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Remittances and Household Welfare: A Case Study of Bangladesh

Author

Listed:
  • Raihan, Selim

    (University of Dhaka)

  • H. Khondker, Bazlul

    (University of Dhaka)

  • Sugiyarto, Guntur

    (Asian Development Bank)

  • Jha, Shikha

    (Asian Development Bank)

Abstract

This paper examines the impacts of international remittances on household consumption expenditure and poverty in Bangladesh using computable general equilibrium modeling of the Bangladesh economy and microeconometric analysis at the household level. The former assesses the economic effects and distributional implications of remittances at the macro, sectoral, and household group levels, while the latter shows the association between remittances and household consumption expenditure, including poverty status. The first results show that remittances have positive effects on the economy and reduce poverty. It is estimated that 1.7 out of the 9 percentage point reduction in the headcount ratio during 2000–2005 was due to the growth in remittances. A closer look at the household level further reveals the positive and significant impacts of remittances on the household’s food and housing-related expenditures. The impacts on education and health expenditures are also positive but insignificant. Moreover, the logit regression results suggest that the probability of the household becoming poor decreases by 5.9% if it receives remittances, which further confirms the positive impact of remittances. Given that migration and remittances also bring costs to the society, the study findings call for policies to maximize their benefits. This includes attracting more remittances through formal channels and increasing their productive use.

Suggested Citation

  • Raihan, Selim & H. Khondker, Bazlul & Sugiyarto, Guntur & Jha, Shikha, 2009. "Remittances and Household Welfare: A Case Study of Bangladesh," ADB Economics Working Paper Series 189, Asian Development Bank.
  • Handle: RePEc:ris:adbewp:0189
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    File URL: http://www.adb.org/Documents/Working-Papers/2009/Economics-WP189.pdf
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    Citations

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    Cited by:

    1. Raihan, Selim, 2012. "Implications of the global economic crisis for the Bangladesh economy," MPRA Paper 38616, University Library of Munich, Germany.
    2. Yaw Nyarko & Kwabena Gyimah-Brempon, 2011. "Social Safety Nets: The Role of Education, Remittances and Migration," RSCAS Working Papers 2011/26, European University Institute.
    3. Imai, Katsushi S. & Gaiha, Raghav & Ali, Abdilahi & Kaicker, Nidhi, 2014. "Remittances, growth and poverty: New evidence from Asian countries," Journal of Policy Modeling, Elsevier, vol. 36(3), pages 524-538.
    4. Raihan, Selim, 2010. "Impact of the Global Financial Crisis on Migration and Remittances in Bangladesh: A Survey Based Analysis," MPRA Paper 37946, University Library of Munich, Germany.
    5. Hossain, Marup & Onel, Gulcan & Mullally, Conner, 2016. "Migration and household decision on occupational choice and investment: Evidence from Bangladesh," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236136, Agricultural and Applied Economics Association.
    6. Raihan, Selim, 2010. "Global Financial Crisis, Remittances, Exports and Poverty in Bangladesh," MPRA Paper 37894, University Library of Munich, Germany.
    7. Aiko Kikkawa & Keijiro Otsuka, 2016. "The Changing Landscape of International Migration : Evidence from Rural Households in Bangladesh, 2000-2014," GRIPS Discussion Papers 16-13, National Graduate Institute for Policy Studies.
    8. Bui, Thi Thanh Nga & Le, Thi Thanh Ngan & Daly, Kevin James, 2015. "Microlevel impacts of remittances on household behavior: Viet Nam case study," Emerging Markets Review, Elsevier, vol. 25(C), pages 176-190.
    9. Sk. Mahmudul Alam, Mahmud, 2012. "Microfinance institutions will be an important instrument to earn more remittance, send remittance and utilize remittance in Bangladesh," MPRA Paper 36459, University Library of Munich, Germany, revised 14 Feb 2012.

    More about this item

    Keywords

    International migration and remittances; Household welfare; Poverty; CGE Model; Microeconometrics; Bangladesh;

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