An analysis of foreign migration destination choice and remittance induced consumption expenditure of Nepalese rural households

Abstract

This thesis examines the factors affecting an individual’s decision to select a migration destination and the impact of remittance sent by foreign migrants on consumption in rural Nepalese households. The study uses Nepal Household Risk and Vulnerability Survey (NHRVS) panel data spanning from 2016 to 2018, produced by the World Bank. We estimate the multinomial logistic regression model to identify the effect of household assets on the choice of migration destinations among India, OECD, Gulf, and Asia. We conclude that household asset accumulation is one of the key determinants of the destination choice of individuals in rural households. Specifically, households with higher asset endowments are more likely to choose OECD countries, followed by the Gulf region, Asia, and India. Moreover, through the use of 2SLS, the study highlights the importance of remittances as a driving force behind enhancing household consumption, welfare, and human capital accumulation within rural households.