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Work‐Related Migration and Poverty Reduction in Nepal
Author(s) -
Lokshin Michael,
BontchOsmolovski Mikhail,
Glinskaya Elena
Publication year - 2010
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/j.1467-9361.2010.00555.x
Subject(s) - counterfactual thinking , poverty reduction , poverty , work (physics) , economics , internal migration , demographic economics , development economics , distribution (mathematics) , instrumental variable , developing country , economic growth , econometrics , psychology , mechanical engineering , social psychology , mathematical analysis , mathematics , engineering
Using two rounds of nationally representative household survey data in this study, we measure the impact on poverty in Nepal of local and international migration for work. We apply an instrumental variables approach to deal with nonrandom selection of migrants and simulate various scenarios for the different levels of migration comparing observed and counterfactual household expenditure distribution. Our results indicate that one‐fifth of the poverty reduction in Nepal occurring between 1995 and 2004 can be attributed to higher levels of work‐related migration and remittances sent home. We also show that while the increase in international work‐related migration was the leading cause of this poverty reduction, domestic migration also played an important role. Our findings demonstrate that strategies for economic growth and poverty reduction in Nepal should consider aspects of the dynamics of domestic and international migration.