Migration and remittance inflows in Nepal with special reference to Gandaki Province

Abstract

Nepal has experienced significant out-migration of unskilled and semi-skilled labor, predominantly to Gulf countries and Malaysia. After 1990s, the remittances sent by these migrants now constitute nearly one-third of the country’s gross domestic product (GDP), yet there is a scarcity of rigorous studies assessing the impact of remittances in the Nepalese context. This study seeks to investigate the determinants of international migration and the socio-economic impact of remittance income on households, alongside an analysis of the current status of migration and remittances in Nepal. Adopting a descriptive research design, the study conducted a cross-sectional survey of 514 households, equally divided between migrant and non-migrant categories, across three districts representing diverse geographies of Gandaki Province. Logit and probit models were employed to evaluate the determinants of migration, while t-tests of significance difference and Chi-square tests of significant association were used to assess the impact of remittances on various socio-economic variables. The results reveal that key determinants of migration include the gender of the household head, household size, Janajati ethnicity, age of the household head, land size, household income, and the educational level of the household head. In regard to economic impact, households receiving remittances were found to have significantly larger land holdings, higher asset values, greater overall income, increased consumption and saving capacity compared to non-receiving households. On the social front, remittances were associated with improved social capital and women’s empowerment, as well as enhanced child education, healthcare and nutrition access, and social networks. However, remittances did not significantly affect livestock ownership and levels of social trust. In conclusion, the study demonstrates that remittances substantially improve both the economic and social outcomes of households in Nepal, highlighting the critical role of labor migration. As such, the findings imply the need for favorable labor migration policies that enhance the well-being of migrant-sending households.