Migrants’ household income grow twofold

The inflow of remittance in Bangladesh has helped double the household income of low-skill migrants, signifying its multi-faceted positive role in keeping the country’s wheels of economy in motion by alleviating poverty, and raising consump-tion.

A recently published World Bank study, titled “World Development Report: Migrants, Refugees, and Societies,” further stated, “Remittances have proved to be a powerful instrument for reducing poverty in origin countries and increasing household income.

“For example, in Bangladesh, remittances from low-skilled migrants doubled their families’ income.”

It should be noted that the report lacks any mention of a specific timeframe. The study however mentions that a low-skill migrant usually gets the opportunity to double his/her household income after recovering the migration costs.

This is evident by the fact that the income of Bangladeshi low-skill workers in Malaysia has increased by 210 per cent. Meanwhile, the income of such low-skill workers living in the USA rose by more than 300 per cent, which is more than the workers of Jordan, Bolivia or Uganda.

However, the income of low-skilled workers from India, Nepal, Sri Lanka or Pakistan working in the USA has gone up more than 500 per cent.

According to the Bangladesh Bank, the amount of remittance inflow in the country was $21.03 billion in FY22. Saudi Arabia and the USA were the top remittance sourcing counties for Bangladesh during that year.

Bangladesh currently has no data on the average income of remittance-dependent households. However, a recent House-hold Income and Expenditure Survey report shows that the country’s overall household income rose to Tk 32,422 in 2022 from Tk 15,988 recorded in 2016.

The World Bank report mentions, “Lowering the cost of sending remittance will require increasing competition among channels in both sending and receiving countries, and ensuring that migrants and their families can compare the costs of all the options available to them.

“Expanding the use of mobile payment services could also help lower costs within the context of a well-regulated market.”

Remittances increase consumption and food security, allow households to spend more on education and healthcare, ena-ble some household members to reduce their working hours and help close gender gaps in Indonesia, Colombia, Nepal, Pakistan and Tajikistan.

In some countries, the role of remittances is like a lifeline, especially in conflict-affected countries such as Somalia.

Besides, remittances protect households from shocks, it can facilitate entrepreneurship by easing financial constraints and remittances reduce poverty even in households that do not receive them in some countries like Philippine, Tunisia, Albania, adds the report.

Returning migrants are also contributing to entrepreneurships in the country.

In Bangladesh, more than two-thirds of returning temporary migrants engage in some form of entrepreneurial or self-employment activity after returning, as opposed to only one-third of similarly educated non-migrant workers.

In contributing to foreign exchange inflow, remittances increase the foreign exchange reserves available to pay for imports and to service the external debt.

The report however mentions that the emigration of highly skilled people from lower-income countries is often referred to as a “brain drain.”

It is an impediment to development when the costs to the origin-society from losing a highly qualified worker outweigh the benefits from the remittances. Wage gaps between destination and origin countries are a key driver of economic migra-tion.

Even after adjusting for the differences in the cost of living, a truck driver in Canada earns over five times more than a truck driver in Mexico. Nurses in Germany earn nearly seven times more than nurses in the Philippines.