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The impact of large-scale migration on poverty, expenditures, and labor market outcomes in Nepal

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  • Shrestha,Maheshwor

Abstract

This paper studies the impact of migration on poverty, expenditures, and labor market outcomes in Nepal. Between 2001 and 2011, the share of male working age population abroad more than doubled, mostly due to young men leaving to work in Malaysia and the Persian Gulf countries. The paper studies the impact using instrumental variables as well as difference-in-difference methods. The findings show that increases in migration to Gulf-Malaysia explain 40 percent of the decline in poverty between 2001 and 2011. The estimates of the marginal propensity of consumption show that a $1 increase in remittance income increases consumption by $0.5, with the largest share going to expenditures on food. The paper also finds that migration increases school enrollment of children, particularly of girls. Furthermore, the findings show that large-scale migration in villages improves labor market outcomes for households without a migrant. An increase in village migration rates of 10 percentage points increases wages by 25 percent, and labor force participation by 4 percentage points. The participation effects are driven by increases in female participation in non-farm sectors, and increased male participation in agriculture. The wage effects are driven by higher agricultural wages for all, and higher non-farm wages for females.

Suggested Citation

  • Shrestha,Maheshwor, 2017. "The impact of large-scale migration on poverty, expenditures, and labor market outcomes in Nepal," Policy Research Working Paper Series 8232, The World Bank.
  • Handle: RePEc:wbk:wbrwps:8232
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    Citations

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    Cited by:

    1. Mishra, Khushbu & Kondratjeva, Olga & Shively, Gerald E., 2022. "Do remittances reshape household expenditures? Evidence from Nepal," World Development, Elsevier, vol. 157(C).
    2. Najeeb,Fatima & Morales,Matias & Lopez-Acevedo,Gladys C., 2020. "Analyzing Female Employment Trends in South Asia," Policy Research Working Paper Series 9157, The World Bank.
    3. Sharma, Hari, 2020. "The effect of emigration and remittances on labour supply of the left-behind: Evidence from Nepal," MPRA Paper 102091, University Library of Munich, Germany.
    4. Bossavie, Laurent & Denisova, Anastasiya, 2018. "Youth Labor Migration in Nepal," Jobs Group Papers, Notes, and Guides 29783617, The World Bank.
    5. Ishwor Adhikari, 2022. "The conundrum of labour shortage in a labour surplus economy: an investigation of Nepal," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 24(2), pages 404-435, December.
    6. Gatskova, Kseniia & Ivlevs, Artjoms & Dietz, Barbara, 2019. "Can Labor Emigration Affect the Education of Girls? Evidence from Tajikistan," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 25(3), pages 96-118.
    7. Hari Sharma & John Gibson, 2020. "Effects of International Migration on Child Schooling and Child Labour: Evidence from Nepal," Working Papers in Economics 20/07, University of Waikato.

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    Keywords

    Inequality;

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