Divergences in expatriating, remitting and investing remittances between semi-urban and rural Bangladesh

Purpose The purpose of this study is to explore the pattern of expansion of overseas market for wage earners, inflow of remittances, its disposal pattern and the extent of non-productive investments. Design/methodology/approach It analyzed behavioral differences between semi-urban and rural househol...

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Bibliographic Details
Published in:International journal of development issues 2018-09, Vol.17 (3), p.288-304
Main Author: Akanda, M. Aminul Islam
Format: Article
Language:English
Subjects:
Aging
Assets
Cost control
Data collection
Economic growth
Economic indicators
Expatriates
Expenditures
Festivals
GDP
Gold
Gross Domestic Product
Health services
Households
Interest rates
Investments
Labor
Land
Overseas employment
Remittances
Rural areas
Rural urban differences
Skill development
Socioeconomic factors
Urbanization
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Summary:Purpose The purpose of this study is to explore the pattern of expansion of overseas market for wage earners, inflow of remittances, its disposal pattern and the extent of non-productive investments. Design/methodology/approach It analyzed behavioral differences between semi-urban and rural households using primary data collected from 78 remittance recipients in Comilla district. Most of the results were produced using arithmetic analytical tools. Besides, one regression model was fit to quantify the effect of a few identical factors on remittance receipts for semi-urban and rural households. Findings Members of semi-urban families were early expatriates, who remitted larger amount than rural ones. Years of schooling and overseas experiences had larger marginal effects on remittance amount in rural area compared to semi-urban one. However, aging and overseas labor freedom influenced negatively anywhere. Rural households were more cautious in spending who had lower remittance elasticity than that of semi-urban ones except of capital items. Household assets were concentrated to lands, home appliances and gold ornaments, the rate of return of which were one-tenth of market interest rate. Practical implications Non-productive investments were concentrated the most to land for rural households and to ornaments for semi-urban ones. However, education and healthcare appeared as necessary elements in livelihoods, for which households might move toward human resource-related investment schemes. Originality/value This study measured the sensitivity with household spending to remittance receipts and why the remittance was not moving into productive schemes in the process of urbanization.
ISSN:1446-8956
1758-8553
DOI:10.1108/IJDI-12-2017-0208