The Impact of International Remittances on Poverty Alleviation in Bangladesh

Bezon Kumar

Abstract

This article mainly explores to what extent international remittances alleviate household poverty in Bangladesh. This study uses primary data collected from 216 households and employs multi-methods. Firstly, I measure the level of household poverty through Foster-Greer-Thorbecke index. The article secondly focuses on the impact of remittances on household poverty using a binary logistic regression model. I found that the level of poverty among remittance recipient households is notably lower than households that are not receiving remittances. Similarly, the probability of a household being poor is alleviated by 28.07 per cent if the household receives remittance. It can be suggested that nursing international remittances can be useful for poverty alleviation in Bangladesh. 

Keywords

remittances; poverty; FGT index; logit model; Bangladesh

Full Text:

PDF

References

Abbas, K., Sabir, H. M., Shehzadi, A. and Abbas, Q. (2014). "Impact of workers' remittances on household welfare in district Jhang (A case study of Tehsil 18 Hazari)". Journal of Finance and Economics, 2 (4): 131-135. https://doi.org/10.12691/jfe-2-4-5

Acosta, P., Calderon, C., Fajnzylber, P. and Lopez, H. (2008) "What is the impact of international remittances on poverty and inequality in Latin America?" World Development, 36(1): 89-114. https://doi.org/10.1016/j.worlddev.2007.02.016

Adhikari, B. (2016). "Impact of remittance on income inequality and poverty reduction in Nepal." International Journal of Innovative Research and Development, 5(14): 223-227. Retrieved from: http://www.internationaljournalcorner.com/index.php/ijird_ojs/article/ view/136823.

Ahmed, R., Saha, J. K., Begum, M. and Haque, M. S. (2018). "Impact of foreign remittances on household welfare in Sylhet Region of Bangladesh." Journal of Business and Economic Management, 6(2): 022-032. doi: 10.15413/jbem.2018.0102.

Al-Mukit, D. M., Shafiullah, A. Z. M. and Sajib, A. H. (2013). "Determination of causality between remittance and import: evidence from Bangladesh." International Journal of Business and Social Science Research, 3(3): 55-62. doi: 10.18533/ijbsr.v3i3.56.

Azam, M., Haseeb, M. and Samsuddin, S. (2016). "The impact of foreign remittances on poverty alleviation: global evidence." Interdisciplinary Approach to Economics and Sociology, 9(1): 264-281. https://doi.org/10.14254/2071-789X.2016/9-1/18

Bam, N., Thagurathi, R. K. and Neupane, D. (2016). "Impact of remittance on household income, consumption and poverty reduction of Nepal." Economic Literature, 13: 32-38. https://doi.org/10.3126/el.v13i0.19148

Bayes, A., Hossain, M. and Rahman, A. N. M. M. (2015). "Remittances and poverty alleviation." The Financial Express. Retrieved from: http://dspace.bracu.ac.bd/xmlui /bitstream/handle/10361/4744/Remittances%20and%20poverty%20alleviation17_nov_2015.pdf?sequence=1&isAllowed=y.

BMET (2018). "Bureau of Manpower Employment and Training." Retrieved from: http://www.old.bmet.gov.bd/BMET/viewStatReport.action?reportnumber=20.

Brown, R. P. C., Jimenez, E. (2007). "Estimating the net effects of migration and remittances on poverty and inequality: Comparison of Fiji and Tonga". WIDER Research Paper No. 2007/23, The United Nations University. Helsinki.

Chami, R., Fullenkamp, C. and Jahjah, S. (2003). "Are international remittance flows a source of capital for development?" IMF Staff Papers, 52 (1): 55-81. Retrieved from: https://www.imf.org/ external/pubs/ft/wp/2003/wp03189.pdf.

Chowdhury, I. A. (2014). "Impacts of remittance on the socioeconomic condition of Bangladesh: an analysis." Innovative Issues and Approaches in Social Sciences, 7(3): 23-43. https://doi.org/10.12959/issn.1855-0541.IIASS-2014-no3-art02

Cuecuecha, A. and Adams, R. J. (2016). "Remittances, Household Investment and Poverty in Indonesia". Journal of Finance and Economics, 4(3): 12-31. https://doi.org/10.12735/jfe.v4n3p12

Ewubare, D. and Okpoi, G. E. (2018). "International remittances and poverty reduction in Nigeria." Journal of Applied Economics and Business, 6(2): 5-24. Retrieved from: http://www.aebjournal.org/articles/0602/060201.pdf.

Faini. R. (2007). "Remittances and the brain drain: do more skilled internationals remit more?" The World Bank Economic Review, 21 (2): 177-191. https://doi.org/10.1093/wber/lhm006

Foster, J., Greer, J. and Thorbecke, E. (1984). "A class of decomposable poverty measures". Econometrica, 52 (3): 761-766. https://doi.org/10.2307/1913475

Gaaliche, M. and Zayati, M. (2014). "The causal relationship between remittances and poverty reduction in developing country: Using a non-stationary dynamic panel data." Atlantic Review of Economics, 1(14): 1-12. Retrieved from: http://www. unagaliciamoderna.com/eawp/coldata/upload/vol1_14_remittances_and_ poverty.pdf.

Ghelli, N. (2018). "Reducing poverty through migration in Bangladesh." BORGEN Magazine. Retrieved from: http://www.borgenmagazine.com/reducing-poverty-through-migration-bangladesh/.

Guinigundo, D. C (2007). "Leveraging Remittances for Development and Poverty Alleviation". International Forum on Remittances, Washington DC.

Gujarati, D. N. and Poter, D. C. (2009). Basic Econometrics. New York: McGraw-Hill/Irwin.

Haider, M. Z., Hossain, T. and Siddiqui, O. I. (2016). "Impact of remittance on consumption and savings behavior in rural areas of Bangladesh." Journal of Business, 01(04): 25-34. https://doi.org/10.18533/job.v1i4.49

Hasan, G, M. and Shakur, S. (2017). "Nonlinear Effects of Remittances on Per Capita GDP Growth in Bangladesh." Economies, 5(3): 1-11. https://doi.org/10.3390/economies5030025

Hatemi-J, A. and Uddin, G. S. (2014). "On the causal nexus of remittances and poverty reduction in Bangladesh." Applied Economics, 46(1): 374-382. https://doi.org/10.1080/00036846.2013.844331

Huary, C. S. and bani, Y. (2017). "Do remittances reduce poverty? An empirical evidence in selected developing countries." Journal of Islamic, Social, Economics and Development, 2(6): 92-101. Retrieved from: http://www.jised.com/PDF/JISED-2017-06-12-21.pdf.

Islam, M. A. and Rayhan, M. I. (2016). "Impact of remittances on poverty: an analysis of developing countries." Global Journal of Quantitative Science, 3(4): 9-13. Retrieved from: http://www.ekrainstitute.org/uploads/02_GJQS_Vol_3_Issue_4_Ashikul_Islam_ Israt_Rayhan_Impact_of_remittances_on_poverty_an_analysis_of_developing_countries_.edited_.pdf.

Karunaratne, H. D. and Dassanayake, I. (2018). "Impact of foreign remittances on poverty reduction in Sri Lanka." Hosei Economic Review, 85(4): 1-52. Retrieved from: http://www.economics-sociology.eu/files/23_185_Azam_Haseeb_Samsudin.pdf.

Khan, Z. S. and Islam, S. (2013). "The effects of remittances on inflation: evidence from Bangladesh." Journal of Economics and Business Research, 19(2): 198-208. Retrieved from: http://www.uav.ro/jour/index.php/jebr/article/view/94.

Kumar, B., Hossain, M. E. and Osmani, M. A. G. (2018). "Utilization of international remittances in Bangladesh". Remittances Review, 3 (1): 5-18. https://doi.org/10.33182/rr.v3i1.424

Kundu, N. (2016). "An enquiry into the sluggish growth of workers' remittance determinants: a case of Comilla'. Journal of Economics and Business Research, 22 (1): 152-167. Retrieved from: http://www.uav.ro/jour/index.php/jebr/article/view/699/0.

Majeed, M. T. (2015). "Poverty effects of remittances: a comparative analysis". Journal of International Development, 27(1): 1-14. https://doi.org/10.1002/jid.3055

Masron, T. A. and Wari, Y. (2018). "Remittance and poverty in developing countries." International Journal of Development Issues, 17(1): 305-325. https://doi.org/10.1108/IJDI-04-2018-0054

Masuduzzaman, M. (2014). "Workers' remittance inflow, financial development and economic growth: a study on Bangladesh." International Journal Economics and Finance, 6(8): 247-267. https://doi.org/10.5539/ijef.v6n8p247

Mollers, J. and Meyer, W. (2014). "The effects of migration on poverty and inequality in rural Kosovo." IZA Journal of Labor and Development, 3(16): https://doi.org/10.1186/2193-9020-3-16

Nahar, F. H. and Arshad, M. N. M. (2017). "Effects of remittances on poverty reduction: the case of Indonesia." Journal of Indonesian Economy and Business, 32(3): 163-177. https://doi.org/10.22146/jieb.28678

Osmani, S. R. and Latif, M. A. (2013). "The pattern and determinants of poverty in rural Bangladesh: 2000-2010." Bangladesh Development Studies, 36(2): 1-40. Retrieved from: https://www.findevgateway.org/library/pattern-and-determinants-poverty-rural-banglad esh-2000-2010.

Pekovic, D. (2017a). "Effects of remittances on rural and regional poverty in the republic of Serbia". Economic Themes, 55(1): 105-120. https://doi.org/10.1515/ethemes-2017-0007

Pekovic, D. (2017b). The effects of remittances on poverty alleviation in transition countries. Journal of international Studies, 10(4): 37-46. https://doi.org/10.14254/2071-8330.2017/10-4/2

Pradhan, B. K. and Mahesh, M. (2016). "Impact of remittances on poverty: an analysis of data from a set of developing countries." Economics Bulletin, 36(1): 108-117. Retrieved from: https://ideas.repec.org/a/ebl/ecbull/eb-15-00346.html.

Rahman, M. M. and Hussain, Z. Z. "South Asian Migration: remittances and beyond." Cambridge Scholars Publishing, UK. Retrieved from: https://www.amazon.com/South-Asian-Migration-Remittances-Beyond/dp/1443878413.

Rahman, M. M., Yong, T. T. and Ullah, A. K. M. A. (2014a). "Migrant remittances in South Asia: an introduction." Migrant Remittances in South Asia, Palgrave Macmillan, 1-30. https://doi.org/10.1057/9781137350800_1

Rahman, M. M., Yong, T. T. and Ullah, A. K. M. A. (2014b). "Migrant Remittances in South Asia social, economic and political implications." International Political Economy Series, Palgrave Macmillan. Retrieved from: https://www.palgrave.com/gp/book/978113 7350794.

Raihan, S., Khondker, B., Sugiyarto, G. and Jha, S. (2009). "Remittances and Household Welfare: A Case Study of Bangladesh". Philippines: Asian Development Bank. https://doi.org/10.2139/ssrn.1618142

Regmi, M. andPaudel, K.P. (2016). "Impact of remittances on food security in Bangladesh." Frontiers of Economics and Globalization, 16(16): 145-158. https://doi.org/10.1108/S1574-871520150000016006

Siddique, H. M. A., Shehazadi, I., Manzoor, M. R. and Majeed, M. T. (2016). "Do international migration and remittances reduce poverty in developing countries?" Science International, 28(2):1519-1524. Retrieved from: https://mpra.ub.unimuenchen.de/ 71246/1/MPRA _paper_ 71246.pdf.

Simiyu, E. J., Mohamed, I. O. and Monayo, E. O. (2018). The relationship between remittance and household poverty in Mogadishu-Somalia. IOSR Journal of Economics and Finance, 9(1): 59-74. Retrieved from: http://www.iosrjournals.org/iosr-jef/papers/Vol9-Issue1/Version-2/F0901025974.pdf.

Sirkeci, I., Cohen, J. H.and Ratha, D. (2012). Migration and remittances during the global financial crisis and beyond. The World Bank. https://doi.org/10.1596/978-0-8213-8826-6

Skeldon, R. (2006). "Migration and poverty: ambivalent relationships." International Migration: Economics and Politics. 18: 47-60.

Tsaurai, K. (2018). The impact of remittances on poverty alleviation in selected emerging markets. Comparative Economics Research, 21(2): 51-68. https://doi.org/10.2478/cer-2018-0011

Ullah, A. K. M. A. (2013). "Exposure to remittances: theoretical and empirical implications for gender." International Migration and Integration, 14: 475-492. https://doi.org/10.1007/s12134-012-0250-8

Ullah, A. K. M. A. (2014). "Gender and remittances: remodeling remittance exposure." Migrant Remittances in South Asia, Palgrave Macmillan, 52-67. https://doi.org/10.1057/9781137350800_3

Ullah, A. K. M. A. (2017). "Do remittances supplement South Asian development?" Remittances Review, 2(1): 31-45. https://doi.org/10.33182/rr.v2i1.436

Wadood, S. N. and Hossain, M. A. (2016). "Microeconomic impact of remittances on household welfare: evidence from Bangladesh." Business and Economic Horizons, 13(1): 10-29. https://doi.org/10.15208/beh.2017.02

Waheed, O. O., Timothy, A. T., Adebayo, S. M. and Ayodele, O. (2013). "Effects of remittances on poverty among rural households in Nigeria." European Journal of Sustainable Development, 2(4): 263-284. Retrieved from: https://ecsdev.org/ojs/index. php/ejsd/ article/view/97.

Wurku, S. and Marangu, J. (2015). "The impact of remittance on poverty: evidence from the South African national dynamics study (NIDS)". African Human Mobility Review, 1(1): 78-99. Retrieved from: http://sihma.org.za/onlinejournal/ahmr-vol-1-no1-january-april-2015.

Refbacks

  • There are currently no refbacks.