- Title
- Determinants and socioeconomic impacts of migration and remittances: the case of Bangladesh
- Creator
- Ahmed, Farhana
- Relation
- University of Newcastle Research Higher Degree Thesis
- Resource Type
- thesis
- Date
- 2023
- Description
- Research Doctorate - Doctor of Philosophy (PhD)
- Description
- The determinants and impacts of migration and remittances on a country's economic development has long been a source of contention, attracting the interest of international organisations, policymakers, and scholars. Migration is also recognised as a powerful driver of sustainable development in the 2030 Agenda for Sustainable Development for migrants and their communities. It provides significant benefits in terms of skills, labour force strength, investment, and cultural diversity. It helps to improve the lives of communities in their home countries through the transfer of skills and financial resources. The literature on migration and remittances is dense, with information on the effects on poverty reduction, consumption, and economic growth. However, there has been limited research into the role of migration and remittances in school dropout, inequality, and the impact of political and financial variables on remittances. Migration is a common scenario in Bangladesh, which includes both internal and international migration. Bangladesh stands eighth on the list for receiving the most remittances in the world in 2021. This huge inflow of remittances helps Bangladesh to mitigate the effects of negative shocks, speed up economic expansion, lower levels of poverty, and raise the level of consumption. However, there has been a knowledge gap on the pattern and determinants of migration and remittances, the impact of remittances on education, and income inequality in Bangladesh employing nationally representative household-level data. There are differences among the results reported in the literature so far concerning migration and remittance in the contexts of determinants (both micro and macro) and the impact of remittance on household inequality and educational outcomes. In light of this, it cannot be certain that research conducted in the context of any other country can be generalised to Bangladesh. The socioeconomic scenario of Bangladesh is very different from any other developing country in terms of culture and population density. Furthermore, nationally representative research on migration and remittances in Bangladesh is scarce. This paucity of research could be because the chapter on migration and remittances was not included in the two largest micro-level datasets i) Bangladesh Bureau of Statistics’ (BBS) Household income and expenditure survey (HIES) and ii) International Food Policy Research Institute’s (IFPRI) Bangladesh Integrated Household Survey (BIHS) before 2010. This thesis bridges the knowledge gap by providing the household-level factors that influence migration, the impact of remittance on educational outcomes using the variable school drop-out and the distributional impact of remittance at the household level. In addition, macro data is utilised to identify the factors influencing remittances to Bangladesh, along with the political and financial factors for the first time in the case of Bangladesh. This thesis also investigates whether remittances contribute to the achievement of the United Nations' Sustainable Development Goals (SDG) 2030 by examining the effect of remittances on education (SDG no. 4) and income inequality (SDG no. 10). This thesis reports on four empirical studies. To determine the pattern and factors that influence migration in Bangladesh, the first empirical study analyses three of the most recent datasets from the International Food Policy Research Institute’s (IFPRI) and Bangladesh Integrated Household Survey (BIHS). Descriptive statistics and binary logistic regression are used for the relevant variables. Overall, the finding suggests the majority of people who migrate internationally are from Bangladesh's major cities, such as Dhaka, Chittagong, and Sylhet. However, a small number of people travel across the border from the Rangpur division. In addition, it has been found that males, compared to females, are more likely to migrate. The second empirical study analyses the impact of domestic remittance (from inside Bangladesh) and international remittance (from outside Bangladesh) on the survival time of education at the household level using a unique national dataset from the Bangladesh Household Income and Expenditure Survey (HIES). Considering the methodological issues such as endogeneity sources and self-selection, this research used the Instrumental Variable Cox Proportional Hazard (IV Cox-PH) model and included asset scores in the models as a proxy measure of households’ wealth index. Furthermore, all the outcomes using the econometric approaches were segregated into three groups: i) those who received no remittances, ii) those who received internal remittances, and iii) those who received international remittances for both HIES 2010 and HIES 2016. This analysis provides a critical picture of the influence of remittances on school dropouts in Bangladesh by giving us a significant positive outcome of the remittances as a whole on education. With the increase in remittance inflows in Bangladesh, the risk of dropping out from education of children aged 6-18 are more likely to fall. The third empirical study uses two household level data sets HIES 2010 and HIES 2016 to determine the effect of remittances on income inequality. To overcome the endogeneity problem with remittances, instrumental variable quantile regression (IVQR) is used in this study for the first time in Bangladesh. This study discovers that remittances have a significant impact on household expenditure, which is supported by statistical evidence at all levels of the distribution. Moreover, the study's findings indicate that both domestic and international remittances increase inequality among Bangladeshi households. The IVQR results for both the HIES 2010 and HIES 2016 datasets are consistent. Overall, the findings of this chapter indicate that while remittances can alleviate poverty, they also increase income inequality among households. The fourth empirical study identified the macroeconomic, financial, and political factors that influence remittance. The International Country Risk Guide (ICRG) provided the unique political determinants. Using data from 1984 to 2020, this study employs Generalised Methods of Moments (GMM) to analyse how macroeconomic, political, and financial factors influenced international remittance flow to Bangladesh. As a solution to endogeneity, generalised methods of moments (GMM) are employed. Three econometric models are used to analyse the factors in the final empirical chapter. The findings imply that remittance inflows are positively affected by real GDP, interest rate differential, school enrolment, exchange rate, external conflicts, good law and order, and financial development. In contrast, inflation and internal conflicts have a negative effect on remittance receipts. These results have several implications. In light of the findings of this study, this research can recommend that the government should reduce the cost of sending remittances, give credit support to migrants and assist them in enhancing their skill sets so that they can earn more and thus return more remittances. The results of the thesis will also assist the government and other relevant parties in developing sound strategies for achieving the Sustainable Development Goals (SDGs). Furthermore, the initiative needs to be taken to increase female migration, increase the skillsets of migrants, maintain political and economic stability, give proper financial access for investment through remittance, and make remittance transactions easier and more lucrative through formal channels compared to informal ones (e.g. Hundi or Hawala). Relevant academics, policymakers, and other stakeholders might utilise the empirical results to get a general understanding of the factors that influence migration and remittance patterns, as well as to assess the effects of remittance on household inequality and children's educational outcomes.
- Subject
- migration; remittances; education; income inequality; economic development; Bangladesh
- Identifier
- http://hdl.handle.net/1959.13/1504666
- Identifier
- uon:55562
- Rights
- Copyright 2023 Farhana Ahmed
- Language
- eng
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