Modelling the Economic Impact of the Rohingya Influx in Southern Bangladesh

IFPRI Discussion Paper 1862

24 Pages Posted: 1 Oct 2019

See all articles by Mateusz J. Filipski

Mateusz J. Filipski

University of Georgia; IFPRI

Ernesto Tiburcio

Tufts University

Paul Dorosh

International Food Policy Research Institute (IFPRI)

John Hoddinott

Cornell University

Gracie Rosenbach

International Food Policy Research Institute (IFPRI)

Date Written: September 4, 2019

Abstract

In the context of the massive influx of Forcibly Displaced Myanmar Nationals to Bangladesh, this paper aims to evaluate the potential consequences on the Southern Bangladesh economy. It adopts an economywide perspective to study the impacts of increased labor supply and increased consumer demand in a general equilibrium framework, using a Local Economy-wide Impact Evaluation (LEWIE) model. The model is used to illustrate the potential effect of a large arrival of displaced populations on wages, the supply and demand of goods, and incomes of migrant and host populations. Simulations enable comparisons between possible scenarios, including two options for the size of the market being impacted (either the smaller Cox’s Bazar District, or the larger Chittagong Division) and several options for aid provisions from international actors. The databases used are the Forcibly Displaced Myanmar Nationals (FDMN) and Host Community Household Survey carried out by IFPRI, BIDS, WFP and ACF in late 2018 and the official Bangladesh Household Income and Expenditure Survey (HIES) 2016. We find that if the migrants enter the Cox Bazar labor markets only, their large number could potentially lead to a large drop in wage levels of around 30%. However, under similar conditions their impact in the much larger Chittagong Division would be limited to a drop of less than 4%. Cash transfers to migrants could mitigate the wage effects by stimulating local demand, but this effect is limited. Some local households may be hurt due to lower wages and higher prices. Matched transfers to local populations and investments in local industry could potentially offset some of these negative impacts.

Keywords: Economic Development, Migration, Refugees, Labor Market, Economic Analysis

Suggested Citation

Filipski, Mateusz J. and Tiburcio, Ernesto and Dorosh, Paul and Hoddinott, John and Rosenbach, Gracie, Modelling the Economic Impact of the Rohingya Influx in Southern Bangladesh (September 4, 2019). IFPRI Discussion Paper 1862, Available at SSRN: https://ssrn.com/abstract=3456751

Mateusz J. Filipski (Contact Author)

University of Georgia ( email )

Athens, GA 30602-6254
United States

IFPRI ( email )

2033 K Street NW
Washington, DC 20006

Ernesto Tiburcio

Tufts University ( email )

Medford, MA 02155
United States

Paul Dorosh

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States
+1 202-862-5600 (Phone)
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HOME PAGE: http://www.ifpri.org/

John Hoddinott

Cornell University ( email )

Ithaca, NY 14853
United States

HOME PAGE: http://https://www.cornell.edu/

Gracie Rosenbach

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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