Do remittances reshape household expenditures? Evidence from Nepal

Bibliographic Data

ID11916342
AuthorsKhushbu Mishra (0000-0002-2158-9921, Stetson University, corresponding author), Olga Kondratjeva (0000-0001-9049-606X, Washington Employment Security Department), Gerald Shively (0000-0002-0460-0762, Purdue University West Lafayette), Gerald E Shively
Year2022
Volume157
Pages105926-105926
Publication date2022-05-12
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueWorld Development (JOURNAL)
Journal identifiersISSN: 0305-750X • E-ISSN: 1873-5991
PublisherElsevier BV (PUBLISHER)
DOI10.1016/j.worlddev.2022.105926
OpenAlexW4280611768
LanguageEN
Citations received24
References cited43

Lack of economic opportunities in their local communities push many individuals to migrate and send remittances to their families. Remittances can potentially influence household spending in sizeable ways, making it an important source of income. This article investigates the impact of remittances on various categories of household expenditure, including those for food, alcohol and tobacco, clothing, ceremonies, healthcare, education, home improvement, agriculture, and livestock. Using data from 5,987 households observed in the 2010/11 Nepal Living Standards Survey and applying an instrumental variable approach, we show that remittances are positively associated with expenditures on food and education. In contrast, we find a negative association between remittances and expenditures on alcohol and tobacco. We further disaggregate our analysis to investigate any differential impact of remittances by gender of the household head and find qualitatively similar results across both genders, suggesting that both male- and female-headed households generally tend to spend remittances in similar ways. Findings regarding household food consumption and education expenditures are generally consistent with previous research on remittances in Nepal, but expand our understanding by examining the impacts of remittances on expenditures on tobacco and alcohol, ceremony, agriculture, and livestock purchases. Through increased consumption of food and greater expenditures on education, remittances have implications for long-term investments in human capital, which can, in turn, increase labor productivity, wage earnings, and overall economic development

Agriculture · Clothing · Consumption (sociology · Demographic economics · Earnings · Economic growth · Economics · Geography · Household income · Human capital · Instrumental variable · Labour economics · Productivity · Remittance · Tobit model · Wage · Gender, Labor, and Family Dynamics · Migration and Labor Dynamics · Poverty, Education, and Child Welfare

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