International Remittances and Household Expenditure Patterns in Bangladesh

Abstract

The study endeavours to investigate how the transfers of international remittances influence the expenditure behaviour of returnee migrant families in Bangladesh. The primary data were collected using the multi-stage stratified random sampling technique through a structured questionnaire from Tangail and Comilla on several expenditure characteristics of migrants. Propensity score matching (PSM) method is employed to assess the impact of remittances on expenditure patterns of returnee migrant households through the estimation of average treatment effects on the treated. The PSM technique has allowed us to evaluate the impact of remittances on several expenditure categories such as food, non-food, education, medical and so on. The study findings divulge that remittances exhibit a significant and positive impact on poverty reduction since they have contributed a lot in terms of income generation and increment of consumption expenditures. Moreover, compared to non-migrant families, migrant families are more exposed to positive behavioural transformations because of their spending on productive investments like non-durable goods, education and health care. Therefore, the findings underline the optimistic view of migration and development theory that foreign remittances support to increase the investments both in the physical and human capital of migrant families as well as to improve the wellbeing of Bangladeshi people. JEL Codes: D10, F24, O15