Households’ characteristics and the modes of remittances in Bangladesh

Abstract

Bangladesh is one of the leading economies of the world in term on international labor migration. It is well known that remittances from international migrants is a major source of income of many Bangladeshi households. However many Bangladeshi households also depends on internal remittances received from the family members residing in other parts of the country. Therefore, the modes of remittances of households in Bangladesh can be categorized as ‘No Remittances’, ‘Internal Remittances’ and ‘International Remittances’. It can be hypothesized that these mode of remittances are associated with the basic characteristics of the households in Bangladesh. The paper empirically invistigates this association. As the mode of remittances can be classified in 3 categories, the paper utilizes Multinomial Logit Model (MNL) to investigate the association between Households’ characteristics and the modes of remittances. The data have been obtained from the Household Income and Expenditure Survey (2010) conducted by the Bangladesh Bureau of statistics. The data depicts that almost 78% households of Bangladesh received no remittances, about 12% received internal and about 9% received international remittances. The paper runs MNL regressions associating the data on households characteriscs such as rural-urban locations, religion, age, sex of houholds’ heads, expenditure shares etc. with these 3 categories. The study reveals that household level variables such as rural-urban locations, age and sex of the households heads, religion, ratio of male, adult and young members etc. are potentially significant in households’ orientation to remittances. Importantly, the results shows positive association of rural location with both internal and international remittances. It also surprisingly shows that the households with female heads are more likely to receive both internal and international remittances compared to the households headed by male. In addition, Muslim households are more likely to receive international remittances. The study however has found insignificant association between higher education and the mode of remittances. The paper contributes to the policy analysis through revealing the association between the households’ characteristics and the various modes of remittances. The finding will provide guidelines in policy debates and future research linking migration, remittances and economic development.