The Impact of COVID-19 on the Remittance Inflows in Bangladesh: An ARDL Approach

Abstract

The key concern of this paper is to bring forth a contemporary estimation of the impact of the ongoing COVID-19 pandemic on remittance inflows in Bangladesh as well as to find out the scenario of whether the migration and exchange rate have impacted on the remittance inflows in Bangladesh based on the monthly data from January 2008 to December 2021. By introducing dummy variable in the Autoregressive Distributed Lag (ARDL) bound testing approach, it is found that the ongoing COVID-19 pandemic has a strong positive impact on the remittance inflows in Bangladesh in the long-run. Besides, there is a positive impact of exchange rate on remittance inflows in the long-run while a negative relationship between the remittance inflows and migration in the long-run in Bangladesh. For the healthiness of the model, various diagnostic tests along with normality and stability test were performed over the period.

Did Remittance Inflow in Bangladesh Follow the Gravity Path during COVID-19?

“…They predicted that countries with less diversified labor destinations would be hit more severely due to the temporary suspension of labor migration. Akter et al (2022) analyzed monthly remittance data of Bangladesh from January 2008 to December 2021 and applied the autoregressive distributive lag (ARDL) estimation technique. They revealed that remittance inflow increased during the pandemic, supporting the "Altruistic" motive.…”