The impact of migrant remittances on poverty reduction in Bangladesh

Abstract

AbstractThis study aims to assess the impact of international remittances on poverty alleviation in Bangladeshi migrant families using household surveys. A Multi‐Stage Stratified Random Sampling approach was employed to collect data from four upazilas of the Tangail and Comilla districts. The propensity score matching (PSM) method is used to evaluate the impact of returnee workers' remittances on household economic welfare that to ensure poverty alleviation. The average treatment effect in treated outcomes using the PSM technique demonstrates that the land asset, income, and expenditure scenario of migrant households has improved significantly compared to nonmigrants, indicating a notable reduction in poverty. Moreover, international remittances also improved savings and investment status substantially, along with wealth accrual and land possession. Hence, international remittances proved to be a boon for migrant families as remittances drove returnee households towards lower poverty in Bangladesh. Intervention programs that include financial literacy components (including digital banking) for safe money transfer and low interest bank loans for migration costs are required to maintain remittance inflows and sustainable reductions in poverty.