Remittances and its Impact on Poverty of Migrant Households: A Study with Special Reference to Relatively Less Developed Districts of West Bengal

Objective: To analyze the impact of remittances on poverty of sample migrant households in the relatively backward districts of West Bengal. It also examines the status of poverty among the migrant households and the significance of different factors determining the poverty at the household level.

Methods/Analysis: The status of poverty is measured by using the methodology of Foster, Greer and Therbecke. A Probit model is called for to analyze the status of poverty, i.e., whether the migrant household is poor or not poor where the household characteristics, socio-economic factors and regional factors are the explanatory variables. The marginal effects are also estimated to analyze extent of change of the status of poverty due to the change of the explanatory variables.

Findings: The earnings from remittances play a crucial role in determining the livelihood pattern of the households. Our study shows that the head count ratio for sample household with remittances is about 39% while it increases to 84 % without any such remittance income. The poverty gap and square poverty gap also significantly reduced with remittance income. For a migrant household the flow of remittances received from migrant members and its share in total income of the household seems to be the sine qua non for diminution of the intensity of poverty. Our result also indicates that higher is the share of remittances in total household income, lower will be the incidence of poverty for such migrant family.

Applications: The findings of the study help for the policy maker to design the policy to overcome the poverty of the migrant households.