Microeconomic impact of remittances on household welfare: Evidences from Bangladesh

Abstract

This paper investigates the impact of both international and domestic remittances and migration on household welfare in Bangladesh. We employ a number of variables such as different types of poverty measures, household consumption expenditure, expenditures on health and education etc. to define household welfare. We use the Household Income and Expenditure Survey 2010 to estimate the impact of remittances on household welfare. To address the issue of self-selection, we have used the Propensity Score Matching (PSM) technique. The results reveal that although both internal and external remittances have significant impact on reducing poverty and increasing consumption expenditure, the degree of impact is much higher for external remittances compared to internal remittances. However we find no impact of remittance on household expenditure on education and healthcare.