Contribution of Workers’ Remittance on National Economy
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Department of Management
Abstract
The research was to analyze the trend of the worker’s remittance and its contribution
on macroeconomic variables of Nepal. Secondary data were used for the study
collected from the Research Department of Nepal Rastra Bank and Economic Survey
of the Ministry of Finance for 28 years from 1990/91 – 2018/19 . Data were analyzed
by using appropriate statistical tools and the descriptive and analytical research
design was used.
The simple regression models were used to test significance of worker’s remittance
and its macroeconomic variables GDP, Consumption, Investment and Saving. The
finding from this study indicates that there was positive relationship between worker’s
remittance and GDP, consumption and saving but negative relationship between
investments. The research also proved that worker’s remittance has a significant
impact on the growth of Consumption and saving but insignificant impact on GDP
and investment of the country. The research also found that the worker’s remittance
income of Nepal has been increasing rapidly during two decades especially from
2000/01. The increasing trend of worker’s remittance affects the balance of payment
(BOP) of country. The study recommend that Nepal needs to further formulate
policies that a) send more worker’s remittances through official rather than unofficial
channel. b) Increase the levels of worker’s remittance by encouraging migrants to
hold their saving in financial assets in the country rather than holding them abroad
and c) encourage migrants to become investor in productive assets in the country.
Keywords: Workers’ Remittance, GDP, Consumption, Saving and Investment.