An Empirical Investigation between Foreign Aid and Fertility Rate among Women in Bangladesh

Shahtaj Mahmud, Maaesha Nuzhat Nazmul and Sakib Bin Amin

Bangladesh is an emerging third world country. The country has potential to develop a great amount in the future; however, high poverty, low rates of literacy and a rapidly increasing population can hinder its development. The fertility rate of Bangladesh had dropped significantly in the early 1990s but it has plateaued ever since entering the third millennium. This might be of great concern to an evolving economy like Bangladesh. A great worth of foreign aid is flowing into the country every year to support its future development. Thus, it is crucial to analyze the effects of foreign aid on the fertility rate of Bangladesh. This paper looks critically at the relationship between foreign aid and fertility rate in Bangladesh over a span of 35 years. Augmented Dickey Fuller (ADF) test has been used to check for unit roots followed by co-integration tests. Finally, the Granger causality test has been performed to look for the direction of relationship. These tests have showed that a bi-directional causal relationship runs between the two variables.

DOI : https://doi.org/10.21102/jbpr.2018.07.131.07