Abstract:
The main purpose of this study is to investigate the nonlinear relationship between
foreign remittance and income inequality of Bangladesh by utilizing yearly data from
1990 to 2018. By using Johansen-Juselius cointegration test and ordinary least
squares approach this study reveals a considerably nonlinear pattern of the
relationship of remittance and income inequality, and portrays as inverted U-shape.
This article also shows that income inequality is positively affected by other factors
such as the unemployment rate and inflation and negatively affected by manpower of
Bangladesh. Thus, the economy of the country might strive to use foreign money, not
just in consumption, in productive sectors, and remittances play a critical role in
maintaining the income balance. The research also suggests that Bangladesh's
manpower resources be used properly to eliminate inequalities.
