Remittances, Poverty and Welfare: Evidence from Cumilla, Bangladesh

Abstract

International remittance is now one of talking issues around the world as it has been playing a vital role in socioeconomic development of the developing countries like Bangladesh since last few decades. Thus, the present study explores the impact of international remittances on household poverty and welfare in Bangladesh. To achieve this objective, the study analyses primary data collected from 360 households from Cumilla district of Bangladesh. To find out the impact of remittances on poverty, the study employs the Foster-Greer-Thorbecke (FGT) index. On the other hand, a one way ANOVA test is used to examine the impact of remittances on household welfare. The paper finds that the incidence, depth and severity of poverty among remittance recipient households is quite less than that of remittance non-recipient households. Empirically, the study finds that about 6 percent of remittance recipient households lives below the poverty line while this rate is 48 percent for non-recipient households. The study also finds that the average gross per capita expenditure of remittance receiving households is three times higher than that of non-recipient households which interprets that recipient households enjoy higher level of welfare. Thus, it is found that remittances have significant influence on household welfare. The study recommends nursing international remittances as an important tool in reducing poverty and enhancing welfare.

Dose Remittances Matter for Openness and Financial Stability: Evidence From Least Developed Economies

“…Therefore, the study finding suggests that the government's external debt indicates domestic inefficiency for capital formation, and debt excessiveness has an immense disadvantageous consequence for the economy. Furthermore, external debt causes instability in the exchange rate and domestic consumption and eventually instability in the economy (Kumar, 2019 ).…”

Construction of Household Welfare Index and Welfare Impact of International Remittances in Rural Bangladesh

“…This reveals a statistically significant relationship between remittances and poverty reduction in such a way that remittance receiving households are involved in different productive activities like business, farming, investment in banks, buying lands, and so on that increase their per capita household income and reduce poverty. This finding allies to Kumar (2019a), Abbas et al (2014), Kumar (2019c), and Raihan et al (2009).…”

“…Contrarily, Cuong and Linh (2018) found a reverse finding: migration has no effect on household welfare, meaning that if migrants do not remit in families in home countries, no effects are found on household welfare. Although remittances significantly reduce poverty (Kumar, 2019c, Abbas et al, 2014, Raihan et al, 2009 and increase consumption expenditure (Kumar, 2019a), it has no influence on education and health care (Kumar, 2019b, Wadood and Hossain, 2017and Raihan et al, 2009. These findings reveal that the influence of international remittances is not unidirectional which stresses to investigate a further study in the context of rural Bangladesh focusing these gaps.…”

“…Like Haider et al (2016), Kumar (2019a) and Kumar et al (2020), Ahmed et al (2018) also found a positive and significant impact of international remittances on housing, drinking water and sanitation facilities, durable goods, education and nedical treatment, household economic condition, and household expenditure. Above findings shows a positive and significant relationship between international remittances and household welfare.…”

Remittances and their Impact on Poverty: An Empirical Study of Developing Countries Using ARDL

“…They also explained how economic development in a country leads to an increase in remittances, which increases the impact of remittances in poverty reduction efforts. Using primary data, Kumar, B. (2019) imagined the impact of remittances on poverty alleviation measures in Bangladesh.…”