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Regular version of the site

Book chapter

Work-Related Migration and Poverty Reduction in Nepal

P. 35-66.
Bontch-Osmolovski M., Lokshin M., Glinskaya E.

The goal of this chapter is to provide empirical evidence of the effect of differential migration strategies on poverty in Nepal. We model the effect of remittances and work migration on consumption of households with a migrants. Using the cross-sectional sample of the nationally representative Nepal Living Standart Survey of 2004, we estimate a model of household migration decisions jointly with the consumption equations by the method of full information maximum likelihood (FIML) with instrumental variables. The method takes into account unobserved household characteristics that could simultaneously affect household migration decisions and household income. We simulate counterfactual expenditure distributions to determine the effect of work-related migration on the levels of aggregate poverty and inequality in Nepal. While most of the recent papers on the effect of migration on inequality and poverty have controlled for heterogeneity and selection in terms of unobserved characteristics, to the best of our knowledge this is the first study using FIML to estimate the trivariate selection model in this context. The novelty of the study resides on separating different effects of domestic and international migration on household welfare.

In book

Work-Related Migration and Poverty Reduction in Nepal
Murrugarra E., Larrison J., Sasin M. Washington: The World Bank Press, 2011.