Migration, Remittance Inflow and Economic Growth of Bangladesh

Abstract

Bangladesh, being one of the top remittances –recipient countries in the World has drawn attention to the remittance–output relationship in recent years. In 2014, remittances contributed to 8.2% of GDP of Bangladesh while the contribution was 6.7 % in 2006. This study investigates the relationship between migrant’s workers remittance and economic growth in Bangladesh. The study covers time series data from 1975 to 2016. Econometric tests Unit root test, Johansen cointegration test and Granger causality model were employed to accomplish the study. The result finds that there is a long run positive relationship between migrant workers’ remittances and economic growth. The findings have important policy implications to augment international migration which will provide a vent for growing labor force and reduce the increasing unemployment rate and also lead to long run economic development through enhanced remittance earning thereby help ensure macro economic stability.

Key words: Migration, Remittance Inflow, Unit Root Test, Johansen cointegration test, Granger causality model.