The Impact of Foreign Remittances on Household Income and Poverty: Empirical Evidence from Bangladesh

The study explores the empirical impact of foreign remittances on Bangladesh s household income and poverty indicators using the most recent wave of nationally representative household income expenditure survey (HIES)-2016 dataset. The goal of this study is to fill a vacuum in the empirical evidence on overseas remittances in Bangladesh. Using a two-stage Heckman selection model to account for selection bias and endogeneity caused by prospective migrants self-selection, the study finds that remittances boost household income and reduce poverty regardless of the measures employed. I find that in Bangladesh, overseas migration and remittances generate many of the expected positive outcomes for migrant-sending households. The evidence of the study suggests that boosting migration and remittances requires enhancing the level of education and skill of expatriate aspirants along with easily accessible financing for the rural poor, particularly farming households so that more people from poorer sections can participate.