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The impact of foreign remittances on poverty in Nepal: A panel study of household survey data, 1996–2011

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  • Wagle, Udaya R.
  • Devkota, Satis

Abstract

Using data from the longitudinal panel surveys of 1996, 2004, and 2011, this paper examines the dynamics of foreign remittances and their impact on poverty in Nepal. The intent is to explore how foreign remittances have evolved and impacted poverty and economic well-being of households. Focusing on a consistent set of households across the three survey rounds in a balanced panel format helps examine the effect of foreign remittances with appropriate controls. Results from methodologically consistent, random-effects regressions that correct for potential attrition and heterogeneity bias support significant poverty-reducing and, more accurately, economic well-being-enhancing effects of foreign remittances especially when originating in countries other than India. This and other findings are valuable to the assessment of policies on utilizing foreign labor migration and remittances as a vehicle to reduce poverty in Nepal.

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  • Wagle, Udaya R. & Devkota, Satis, 2018. "The impact of foreign remittances on poverty in Nepal: A panel study of household survey data, 1996–2011," World Development, Elsevier, vol. 110(C), pages 38-50.
    • Handle: RePEc:eee:wdevel:v:110:y:2018:i:c:p:38-50
    DOI: 10.1016/j.worlddev.2018.05.019
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    5. Mercy. T. Musakwa & N. M. Odhiambo, 2020. "Remittance Inflows and Poverty Dynamics in South Africa: An Empirical Investigation," SAGE Open, , vol. 10(4), pages 21582440209, December.
    6. Kapri, Kul & Ghimire, Shankar, 2020. "Migration, remittance, and agricultural productivity: Evidence from the Nepal Living Standard Survey," World Development Perspectives, Elsevier, vol. 19(C).
    7. Sven Steinkamp & Frank Westermann, 2022. "Development aid and illicit capital flight: Evidence from Nepal," The World Economy, Wiley Blackwell, vol. 45(7), pages 2305-2336, July.
    8. Mercy. T. Musakwa & N. M. Odhiambo, 2019. "THE impact of remittance inflows on poverty in Botswana: an ARDL approach," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-13, December.
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    10. Adhikari, Laxmi D. & Saghaian, Sayed, 2022. "Research Report: Impact of Remittance on Household Welfare: Evidence from the Western Region of Nepal," Journal of Food Distribution Research, Food Distribution Research Society, vol. 53(1), March.
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    More about this item

    Keywords

    Foreign remittance; Poverty; Economic well-being; Nepal; Panel data;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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