Remittances, Poverty and Welfare: Evidence from Cumilla, Bangladesh

Bezon Kumar

doi:10.11648/j.ajdmkd.20190401.17

Abstract

International remittance is now one of talking issues around the world as it has been playing a vital role in socio-economic 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.

Highlights

Developing countries like Bangladesh have been generating significant numbers of out-migration due to adverse economic conditions and multi-faceted socioeconomic threats [1,2,3]
The study seeks the answer to these research questions: (1) what is the impact of international remittances on household poverty? (2) what is the impact of international remittances on household welfare? To find out the answer to these questions, the study employs several statistical approaches
The study mainly highlights two questions for investigation. Such as: (1) what is the impact of international remittances on household poverty? and (2) what is the impact of international remittances on household welfare? To seek the answer to these questions, the study uses primary data collected from remittance recipient and non-recipient households and employs several statistical approaches

Summary

Introduction

Developing countries like Bangladesh have been generating significant numbers of out-migration due to adverse economic conditions and multi-faceted socioeconomic threats [1,2,3]. People of the developing economy, especially rural people, undergo whipping pangs of poverty, unemployment and lower living standards due to a low income based agrarian economy and these dilapidated conditions compel them to opt for migration in search of better and improved economic condition [4]. Similar to many developing nations, Bangladesh is entangled with the challenges of poverty, unemployment, low standard of living and gigantic amount of population. These economic threats are felt deeper in the rural areas than urban centers in the country. In order to alleviate the hardship of poverty and unemployment, and to improve living standards, Bangladeshi diaspora, living mainly in Middle East and European countries, send remittances to their families in Bangladesh. In 2015, about eight million Bangladeshi who work abroad have sent US$15.8 billion remittances [6,7]

Methods

Results

Conclusion