The Role of Migration and Foreign Remittances in Bangladesh’s Economic Growth: An Empirical Analysis
DOI:
https://doi.org/10.69728/jst.v11.54Keywords:
Migration, Remittance, GDP, Unit Root Test, Cointegration Test, Granger Causality TestAbstract
Migration and foreign remittances have emerged as one of the most significant economic factors in Bangladesh in recent years due to their influence on economic growth. This study examines the intricate relationship between GDP and foreign remittances in Bangladesh over the period 1980–2022, using time series data and econometric methods. The analysis relies on secondary data from reputable sources, including the Bangladesh Economic Review (BER), Bangladesh Bank, and the Bangladesh Bureau of Statistics (BBS). A Vector Error Correction Model (VECM) was employed to assess long-term and short-term relationships between the variables. The results reveal a positive long-term relationship between foreign remittances and GDP, highlighting the crucial role remittances play in Bangladesh’s economic growth. However, migration exhibits a negative correlation with GDP in the long run. The Granger Causality Test indicates that foreign remittances have a unidirectional causal effect on GDP in the short term, but migration does not significantly influence GDP in either direction. The findings suggest that while remittances are a key driver of short-term growth, migration’s long-term effects on economic output require more strategic policy intervention. Based on these results, the study recommends that Bangladesh’s government enhance its policies on remittance management, invest in skill development for migrant workers, and develop labor export strategies to maximize the benefits of remittances for sustainable economic growth.
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