Remittances and Household Welfare: A Case Study of Bangladesh
Raihan, Selim; Khondker, Bazlul H.; Sugiyarto, Guntur; Jha, Shikha | December 2009
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 set of results shows that remittances have positive effects on the economy and they reduce poverty. The paper estimates 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. This implies a limited role of remittances in creating domestic demand for rebalancing growth and in developing human capital necessary to achieve the MDGs. However, results based on logit regression 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.
Citation
Raihan, Selim; Khondker, Bazlul H.; Sugiyarto, Guntur; Jha, Shikha. 2009. Remittances and Household Welfare: A Case Study of Bangladesh. © Asian Development Bank. http://hdl.handle.net/11540/1840. License: CC BY 3.0 IGO.ISSN
1655-5252
Keywords
Alleviating Poverty
Anti-Poverty
Extreme Poverty
Fight Against Poverty
Global Poverty
Health Aspects Of Poverty
Indicators Of Poverty
Participatory Poverty Assessment
Poverty Eradication
Poverty Analysis
Poverty In Developing Countries
Poverty Reduction Efforts
Urban Poverty
Public Financial Management
Financial System
Financial Statistics
Development Indicators
Environmental Indicators
Economic Indicators
Educational Indicators
Demographic Indicators
Health Indicators
Disadvantaged Groups
Low Income Groups
Socially Disadvantaged Children
Rural Conditions
Rural Development
Social Conditions
Urban Development
Urban Sociology
Pension Funds
Mutual Funds
Social Equity
Financial Aspects
Fiscal Policy
Poor
Economic forecasting
Health expectancy
Social groups
Political participation
Distribution of income
Inequality of income
Developing countries
Rural community development
Mass society
Social change
Social policy
Social stability
Population
Sustainable development
Peasantry
Urban policy
Urban renewal
Pension plans
Individual retirement accounts
Employee pension trusts
Investment management
Investments
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Citable URI
http://hdl.handle.net/11540/1840Metadata
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