Migration and household decision on occupational choice and investment: Evidence from Bangladesh

We study the roles of migration and remittances along with other income sources on investment decisions in rural Bangladesh. We estimate households’ investment equations conditional on their participation in and income from alternative (farm and non-farm) activities in the context of household’s current endowments and existing market structures. Using a true household-level panel data from rural Bangladesh covering 2000, 2004, and 2008 with 1223 sample points, we estimate the effects of migration and remittances on household’s investment in own cultivated land, land rent out to other households, livestock and non-farm business capital. Results show that remittances decrease household own cultivated land and also decrease land rent out to other households. We explain this result by controlling households labor endowments, education status and existing market imperfections. Our results also show that female headed households overall invest less in self-employment activities when they receive remittances. We find that remittances have little investment effects in general which is expected result given the overall low productive investment rate of remittance receiving households in Bangladesh.

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Conference Paper/ Presentation
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JEL Codes:
D43; E22; F22; F24; O12

 Record created 2017-04-01, last modified 2018-01-23

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