Remittances and Happiness of Migrants and Their Home Households: Evidence Using Matched Samples

Abstract

This paper explores how remittances influence happiness among migrants and their households of origin. It is based on a novel data set of matched samples of Bangladeshi migrant households (living in the UK and Malaysia) and their origin families in Bangladesh. Empirical findings suggest that remittances play a significant role in stimulating migrants’ happiness. We also find that the households of origin’s life satisfaction not only depends on receiving remittances from the emigrants, but also other factors such as number of migrants from the household living abroad and the migrants’ country of destination.

Acknowledgements

We are grateful to both Paul W. Miller and the Australian Research Council (ARC) for financial assistance regarding data collection. The authors are also grateful to the editor and the two anonymous referees for very helpful comments and suggestions that materially improved the paper. The data and all the relevant codes used in this paper are available upon request from the corresponding author. Participants at the 11th Annual Asian Business Research Conference organised by World Business Institute, Australia, held in BIAM Foundation, Dhaka, Bangladesh, December, 2014 are kindly acknowledged.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. For an extended review of happiness literature see Dolan et al. (2008).

2. For a detailed discussion see, Von Kleist (2010).

3. MENA refers to 20 member countries of Middle East and North African Countries.

4. Note that this similarity does not indicate that both groups have similar socio-economic status.

5. See also Wooldridge (2002) (chapter 15, pp. 503–509); Greene, Harris, and Hollingsworth (2015).

6. We experimented with bivariate ordered probit specifications allowing for correlations across samples, however, presumably due to small sample size, convergence problems were encountered. Tables reporting the partial effects of selected variables are available as supplementary material to this paper.

7. For an extended review see Nguyen et al. (2006).