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This article mainly explores to what extent international remittances alleviate household poverty in Bangladesh. This study uses primary data collected from 216 households and employs multi-methods. Firstly, I measure the level of household poverty through Foster-Greer-Thorbecke index. The article secondly focuses on the impact of remittances on ho...
Contexts in source publication
Context 1
... addition, remittance also causes brain drain, which has strong negative effects on a country's long-run economic growth (Faini, 2007). The literature show both positive and negative impacts of international remittances at household, community, and national levels, as presented in Table 2. ...Context 2
... the studies in Table 2, Ewubare and Okpoi (2018) found an interesting result for Nigeria. They found that in the long run, while domestic remittances intensified poverty, foreign remittances reduced poverty incidence. ...Context 3
... below variables have been considered in the regression model and their expected sign has been assumed following earlier literature. The list and relationship of these variables with the dependent variable have been presented in Table 2. ...Context 4
... addition, remittance also causes brain drain, which has strong negative effects on a country's long-run economic growth (Faini, 2007). The literature show both positive and negative impacts of international remittances at household, community, and national levels, as presented in Table 2. ...Context 5
... the studies in Table 2, Ewubare and Okpoi (2018) found an interesting result for Nigeria. They found that in the long run, while domestic remittances intensified poverty, foreign remittances reduced poverty incidence. ...Similar publications
Weighted Logistic Regression (WLR) is a method used to overcome imbalanced data or rare events by using weighting and is part of the development of a simple logistic regression model. Parameter estimation of the WLR model uses Maximum Likelihood estimation. The maximum likelihood parameter estimator value is obtained using an optimization approach....
Though many scholars have written several articles on the livelihoods activities of the tribal population, only a few have tried to offer an outsider in-depth analysis of the livelihoods of tribal people, specifically those in North East India. The few research on this topic mainly focused on the challenges being faced by tribal communities without...
Citations
... [23] analyzed the aforesaid relationship for 71 developing countries and concluded that inward remittances have a significant positive impact on the severity, level, and depth of poverty. [24] examined the impact of international remittances on poverty alleviation in Bangladesh and found that the level of poverty is significantly higher in households that don't receive remittances and vice-versa. The paper also conducted the binary logistic regression model and concluded that if a household receives remittances, then the probability of that household being poor declines by 28.07 per cent. ...
The Government of Bangladesh (GoB) first implemented the cash incentive of 2 percent in July 2019 and continued the scheme with some modifications amid the pandemic to enhance remittance inflows through formal channels and ensure macroeconomic stability in the country. This study examines the impact of the cash incentive introduced by the GoB to boost remittance inflow using the Interrupted Time Series (ITS) analysis along with the Chow test for structural stability. While ITS analysis has been employed by numerous studies in the healthcare sector, but this paper uses such analysis for the first time in any type of migration study in Bangladesh. We have used ITS as it is most effective in measuring the impact of policy interventions that are expected to act either quickly after an intervention or within a stipulated time frame. The study is also the first to examine the region wise efficacy of policy intervention in the country. Monthly Remittance Inflow data from July 2013 to December 2021 has been used for the analysis. Chow test results conclude that the policy intervention had a significant impact while the ITS analysis findings demonstrated that the cash intervention significantly increased both aggregated and region-specific remittance inflows, highlighting the significance of the action. The overall findings revealed that the introduction of cash incentive in July 2019 resulted in an immediate, sustained increase of 6.68 percent in remittance inflows, with a further increase of 0.25 percent every month. Region wise analysis shows that the impact was highest in the USA & UK region and lowest in the Middle Eastern region, which signifies issues related to prevalence of hundi market, skillset of migrant workers, average monthly salary, and remittance sending costs. Our research provides policymakers with significant information to implement customized policies that ensure macroeconomic stability by enhancing remittance inflows through formal channels.
... Mehedintu et al. (2019) studied nine emerging countries in the European Union from 2005 to 2017 and found that while remittances and the risk of poverty threshold were influenced by the global economic crisis, remittance trends varied among countries. In Bangladesh, Kumar (2019) analyzed data from 216 households and found that households receiving remittances had significantly lower poverty levels compared to those not receiving remittances. Receiving remittances reduced the probability of a household being poor by 28.07%, indicating a strong positive impact on poverty alleviation. ...
Purpose
This study aims to examine the influence of global and local structural factors on reducing poverty.
Design/methodology/approach
The research uses data spanning from 1996–2022 and uses the nonlinear autoregressive distributed lag model. This model allows for the assessment of the short and long-term effects of remittance inflow (RI) growth, control on corruption and employment rate (ER) on poverty reduction in India.
Findings
The research findings indicate that in the short run, an increase in international RIs, a higher control of corruption and a greater ERare associated with a decrease in poverty in India. Specifically, a positive change in RIs and control of corruption significantly reduces poverty, while an increase in the ERhas a substantial impact. However, in the long run, only a positive change in RIs and a higher control of corruption continue to significantly reduce poverty.
Originality/value
This study makes several significant contributions to the existing literature. First, it examines the simultaneous impact of three structural factors on poverty, offering insights into their combined long-term effects on the economy. Second, unlike previous studies, this research investigates the nonlinear effects on poverty, which is particularly relevant for developing nations. Lastly, this study aligns with the United Nations’ Sustainable Development Goal 1, which aims to end poverty in all its forms everywhere. The findings of this study are expected to assist Indian policymakers in formulating effective poverty eradication strategies and provide guidance for other developing nations facing similar challenges.
... In Indonesia, Faiza and Mohd (2017) used a dataset spanning from 1983 to 2015 and employed the ordinary least squares (OLS) methodology, revealing a negative correlation between remittance inflows and poverty rates, with a 2.56 percent drop in poverty rates for every 1 percent increase in remittances. Further reinforcing the positive impact of remittances on poverty reduction, Kumar (2019) found that households receiving foreign remittances in Bangladesh exhibited lower poverty levels, with a 28.07 percent likelihood of reducing poverty. In Kosovo, Arapi-Gjini et al. (2020) surveyed 8000 households in 2011 and demonstrated that remittance inflows contributed to the decrease of poverty, both in absolute and relative terms. ...
This research article delves into the intricate relationship between remittance inflows and poverty eradication in the South Asian region, spanning the years from 1980 to 2021. Employing the autoregressive distributed lags (ARDL) model methodology, this study investigates the multifaceted dynamics of remittances while considering key control variables, including inflation , trade openness, and economic growth. The findings of this study unveil compelling insights into poverty reduction. Remittance inflows emerge as a potent instrument in alleviating poverty, exerting a positive impact in both the short and long term. In contrast, an elevated inflation rate is found to exacerbate poverty levels within the region. Interestingly, trade openness emerges as a crucial driver of long-term poverty reduction, while the effect of economic growth on poverty mitigation remains negligible. Notably, this research stands as a pioneering effort within the South Asian context, employing the poverty headcount ratio with a $2.15 per day threshold to gauge poverty levels. The implications of these findings are substantial for policymakers. The study recommends a shift in policy focus towards encouraging investment oriented utilization of remittances, emphasizing their potential to foster sustainable economic development beyond immediate consumption. Moreover, maintaining effective control over inflation rates over extended periods is deemed imperative for the region's success in poverty reduction. Furthermore, policymakers are urged to formulate trade policies that favor small-scale entrepreneurs, fostering inclusive growth and contributing to the long-term goal of poverty eradication. In sum, this research advances our understanding of the complex interplay between remittances, inflation, trade openness, and economic growth in the context of poverty alleviation in South Asia. Its empirical insights provide valuable guidance for policy-makers striving to forge a path towards a more equitable and prosperous future for the region's inhabitants.
... Whereas, much attention was not devoted to seeing the effect of remittances in rural Bangladesh at the household level. Few former studies have attempted to explore the impact of remittances on Bangladesh's economy in terms of household income (Khan, 2008), welfare (Wadood & Hossain, 2017) and poverty reduction (Akhter & Islam, 2019;Kumar, 2019). ...
The study endeavours to investigate how the transfers of international remittances influence the expenditure behaviour of returnee migrant families in Bangladesh. The primary data were collected using the multi-stage stratified random sampling technique through a structured questionnaire from Tangail and Comilla on several expenditure characteristics of migrants. Propensity score matching (PSM) method is employed to assess the impact of remittances on expenditure patterns of returnee migrant households through the estimation of average treatment effects on the treated. The PSM technique has allowed us to evaluate the impact of remittances on several expenditure categories such as food, non-food, education, medical and so on. The study findings divulge that remittances exhibit a significant and positive impact on poverty reduction since they have contributed a lot in terms of income generation and increment of consumption expenditures. Moreover, compared to non-migrant families, migrant families are more exposed to positive behavioural transformations because of their spending on productive investments like non-durable goods, education and health care. Therefore, the findings underline the optimistic view of migration and development theory that foreign remittances support to increase the investments both in the physical and human capital of migrant families as well as to improve the wellbeing of Bangladeshi people.
JEL Codes: D10, F24, O15
... Some scholars assessing the micro-level effects of remittances focus on income growth or poverty reduction in the case of developing countries; few of these are in the Bangladeshi context, and those that exist are not devoted to seeing the impact of remittances at the household level in rural areas of Bangladesh. Few micro-level studies specifically explore the impact of remittances on household income (Khan 2008;Chowdhury and Radicic 2019;Ahmed 2022), economic welfare (Wadood and Hossain 2017), and poverty reduction (Akhter and Islam 2019;Kumar 2019) in Bangladesh. ...
The study evaluates the impact of returnee remittances (RRs) on the well-being of migrant households in Bangladesh using survey data collected from two migrant-intensive districts using multi-stage stratified random sampling. Our findings reveal that RRs have a positive and significant impact on subjective, objective, and relational dimensions of well-being. The pre-post analysis suggests that sensible investments in human capital and positive agreement on improved social status by migrants confirm their subjective well-being. Increased participation of migrant families in regular social ceremonies ensures relational well-being. Moreover, the findings for objective well-being employing the propensity score matching (PSM) technique indicate that compared to non-migrants, remittances contribute to returnee migrants’ land possession, income, expenditure, savings, and investment base. Hence, RRs proved to be an effective medium for ensuring migrant households' welfare in Bangladesh by contributing substantially to income generation, upgrading living standards, and improving the social recognition level. Policies aiming at launching intervention programs of financial literacy including digital finance for safe money transfer and creating a conducive atmosphere for investment are essential to maintain remittance inflows and to foster RR's positive impact more sustainable.
... Alongside income, past studies have also identified several crucial factors, such as income inequality (Hazlewood, 1978;House and Killick, 1981;Ravallion, 1997;Adams, 2004;Fosu, 2015;Khemili and Belloumi, 2018;Neaime and Gaysset, 2018;Sehrawat and Giri, 2018;Leow and Tan, 2019;others), remittances (Adams, 1991;Stark and Taylor, 1989;Adams and Page, 2005;Gupta et al., 2009;Adams and Cuecuecha, 2013;Imai et al., 2014;Akobeng, 2016;Masron and Wari, 2018;Azizi, 2019;Kumar, 2019;Arapi-Gjini et al., 2020), digitalization (Venkat, 2001;Akanbi and Akanbi, 2012;Myovella et al., 2020) and microfinance (Hulme and Mosley, 1996;Mosley, 2001;Shaw, 2004;Coleman, 2006;Imai et al., 2014;Hadj Miled and Rejeb, 2018;Sohn and Ume, 2019;Mushtaq and Bruneau, 2019;Elsafi et al., 2019). ...
Purpose
The objective of this study is to examine the moderating effect of microfinance on the digital divide in developing countries.
Design/methodology/approach
On the methodology, the econometric method employed to estimate the equation is based on the two-stage least squares (2SLS).
Findings
This study confirms that microfinance can play an important role in mitigating the adverse effect of digitalization on poverty.
Research limitations/implications
Thus, governments should prioritize and encourage the integration of digital technologies with robust microfinance systems to effectively combat poverty, given the importance of microfinance.
Originality/value
Given the importance of digital technology to businesses and economic development, we need to search for a better solution that allows digital technology to be further developed but at the same time, is not harmful to the poor. The issue of the poor, either financially or technically can be partially resolved if the poor is given the necessary and sufficient assistance. Therefore, this paper examines whether microfinance can be part of solutions to the digital divide in developing countries.
... Despite remittances playing a crucial role in advancing the socio-economic development of Bangladesh, there has been limited empirical research on how remittances affect household well-being, thereby hindering a comprehensive understanding of their overall impact in Bangladesh. For instance, prevailing studies, such as Kumar (2019) and Moniruzzaman (2022), analyze very small samples that are not representative of the socioeconomic perspective of Bangladesh. Consequently, the findings of these studies may draw unrealistic implications. ...
... Analyzing survey data from 8,449 households collected in 2014 using PSM estimation, Akhter and Islam (2019) demonstrate that domestic and international remittances reduce poverty in Bangladesh. Kumar (2019), analyzing a survey of 216 households, finds that households receiving remittances observe lower poverty than non-recipients. Using the ARDL model, Hatemi-J and Uddin (2014) find a long-run equilibrium relationship between remittances and poverty alleviation in Bangladesh from 1976 to 2010. ...
This paper analyzes the effect of foreign remittances on household well-being at both national and regional levels in Bangladesh, utilizing extensive data from the latest Household Income and Expenditure Survey (HIES) conducted in 2016. The study, employing the Heckman two-step selection control method, finds that remittances significantly increase household income and reduce poverty incidence, depth, and severity. The study also reveals that migrant families experience substantial income and poverty reduction gains. The 2SLS-IV estimation, using the logarithm of historical migration stock as an instrument, further confirms these findings, providing additional support for the positive impact of remittances on household well-being. The findings are also consistent with the previous round of HIES 2010 data. However, the regional analysis identifies heterogeneous effects of remittances on household well-being among Bangladesh's eastern and western administrative divisions. The study demonstrates that families with higher migration density in the East benefit substantially more than those with lower migration density in the West. These findings underscore the significance of regional disparities in terms of the effects of remittances on household well-being in Bangladesh.
... This effect can be difficult to measure and is often complicated by the fact that the indirect impact is not easy to account for (Chaudhary, 2020;Ullah, 2017;Xing, 2018). There is evidence showing that remittances help alleviate poverty in certain developing countries (Chen & Jayaraman, 2016;Kumar, 2019). Recent studies also link remittances to reducing food insecurity, especially in Sub-Saharan Africa (Ebadi et al., 2020). ...
... Furthermore, this research employs contemporary and advanced data analysis techniques, specifically the ARDL model and Toda Yamamoto causality, to provide a novel perspective. This approach sets the study apart from earlier investigations in Nigeria that predominantly employed conventional estimation methods, as evidenced in works such as (Kumar, 2019;Oke et al., 2011;Oluwafemi & Ayandibu, 2014). By incorporating these previously unexplored variables and employing advanced analytical tools, this study expands our understanding of the intricate relationship between remittances, financial sector development, and these critical contributing factors in the Nigerian context. ...
Purpose ― The study aims to investigate the impact of remittances on financial sector development in Nigeria using data from 1990 to 2021.Method ― The study examines the variables' relationship using the Autoregressive Distributed Lag (ARDL) and Toda Yamamoto (TY) Causality.Findings ― The study finds that remittances have a positive and significant long-run impact on financial sector development. Total reserves and imports of goods and services have a negative and significant long-run impact. In the short run, remittances and deposit interest rates positively and significantly impact financial sector development, while total reserves and total population have negative and significant impacts. The Toda-Yamamoto causality result indicates a two-way causal relationship between financial sector development and remittances.Implication ― The study recommends that the government employs policies encouraging channeling remittances through a formal banking system, as well as ensuring that such remittances received are channeled to finance productive investment, hence financial development.Originality ― The novelty of this research relates to the use of the three main indicators of remittances in an economy, which are the import of goods and services, total reserves, and deposit interest rates, to examine its impact on financial sector development in Nigeria
... Moreover, it was also found that there is a 28.07% probability of alleviating poverty if the household receives remittance (Kumar, 2019). A survey-based study of 8,000 households in Kosovo conducted in 2011 discovered that remittance inflows aid in poverty reduction at both absolute and relative levels (Arapi-Gjini et al., 2020). ...
The purpose of this paper is to empirically examine the role of remittance inflow in reducing poverty in the South Asian region. A time-series dataset of the South Asian region for the period 1980–2021 is being considered for this study, and the autoregressive distributed lags model has been applied to examine the short- and long-run relationship between remittance inflows along with control variables, including inflation, trade openness and economic growth on poverty reduction. The results indicated that remittances have a substantial effect on poverty in both the short and long run. While inflation appeared to be a barrier to poverty reduction in the long term. Lastly, trade openness was also found to negatively affect poverty in the long run. It is the first inference in the context of South Asia that has captured income-based poverty in the form of household consumption expenditure. The study suggests that economic policymakers should devise the policy in such a manner that remittance inflows can be used for investment rather than only for consumption. Furthermore, inflation should be kept under control in the long run, and trade policies should be designed in such a way that they provide leverage to small-scale entrepreneurs, thereby reducing poverty in the long run.
JEL Codes: F24, F62, F63, P46
