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Welfare and Equity Impacts of Cross-Border Factor Mobility in Bangladesh: A General Equilibrium Analysis HOSSAIN, Sharif M. HOSOE, Nobuhiro Factor mobility migration remittances foreign direct investment computable general equilibrium analysis https://www.grips.ac.jp/list/jp/facultyinfo/hosoe_nobuhiro/ Bangladesh is one of the top remittance recipient countries in the world and it is the second largest source of the country’s foreign exchange earnings. However, in recent years, remittance inflows into Bangladesh have declined steadily because of real income reductions of migrants. This trend in income has increased the number of returning migrants, making domestic employment less secure. To address this issue, we develop a recursive dynamic CGE model for Bangladesh that describes the allocation of employment between domestic and foreign labor markets in response to a foreign wage premium, competition between local firms and multinational enterprises in the ready-made garments (RMG) sector, and distributional impacts of factor mobility on different household groups. Our simulation results show that returning migrants reduce household welfare by lowering wages and increasing unemployment, particularly for unskilled workers in the domestic labor market. Using counteractive policy options, we examine the impacts of FDI promotion in the RMG sector and of a human-capital development program. Based on our results, we conclude that the former policy minimizes the negative impacts of foreign labor market shocks, while a combination of both policies is more equitable. JEL Classification Codes: C68, F21, F22, O15 It is gratefully acknowledged that this study was supported by the JSPS KAKENHI Grants (18J11669 and 16K03613). GRIPS Policy Research Center 2019-01-17 eng technical report AM https://doi.org/10.24545/00001661 https://grips.repo.nii.ac.jp/records/1671 10.24545/00001661 https://ideas.repec.org/p/ngi/dpaper/18-22.html https://ideas.repec.org/p/ngi/dpaper/18-22.html GRIPS Discussion Papers DP18-22 https://grips.repo.nii.ac.jp/record/1671/files/DP18-22.pdf application/pdf 1.1 MB