Effects of Remittances on Health Expenditure and Types of Treatment of International Migrants' Households in Bangladesh

Background: The economy of Bangladesh is characterized by remarkable progresses in the area of international migration, resulting in a huge inflow of remittances. Although a number of studies have attempted to analyze the effect of foreign remittances on household expenditure pattern, no effort has been made to critically analyze the effect of migration and remittance flow on health expenditure of migrant households. We sought to answer the questions: (1) Is there any effects of effect of remittance in the health expenditure of recipient households; and (2) Is there any effect on the pattern of treatment chosen by those households?

Methods: We analyzed the latest nationally representative data set, the Household Income and Expenditure Survey (2010) of Bangladesh. Descriptive analysis, standard micro econometric techniques were carried out. In order to distinguish the type of treatment a migrant household chooses, a multinomial logit model had been estimated. In addition, the plausible endogeneity problem of migration in estimating the model of health expenditure had been tackled by using instrumental variable method where distance from the remittance sending country was used as an instrument.

Results and discussions: Study showed that, a 1 percent increase in remittance tends to increase monthly per capita health expenditure by 50 Taka ($.65). Our estimation also found that, having a migrant membercouldhave significant impact on the type of treatment (e.g. government, NGOs, private and local home remedies) that a household will choose from. Thus international migration and resulting remittances can have significant implication towards the health status of households.

Conclusion: Given the resource constraints, the financing of health sector in Bangladesh requires careful planning and management. Being one of the highest remittance recipient countries of the world with a promising yet challenging health sector, findings of our study will direct better policy options for designing effective health sector strategies.