International remittances and nonfarm entrepreneurship among the left‐behind: Evidence from Nepal

Paras Kharel, Jorge Dávalos, Kshitiz Dahal

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Resumen

Nepal has one of the largest personal remittances-to-gross domestic product ratios globally, which raises questions regarding the role of remittances in key welfare–related outcomes among the left-behind population. This paper assesses the impact of remittances from international migration on the left-behind households’ engagement in nonfarm self-employment and on the revenues of the nonfarm enterprises they operate. The empirical analysis is based on a Nepal household survey that includes an enterprise module for 2011 and on an instrumental variable-tobit econometric specification. In accordance with Gronau's theoretical framework, remittances were found to discourage women's engagement in nonfarm self-employment (disincentive effect), whereas there was no significant effect on men. Consequently, we find that the disincentive effect was sufficiently strong to exert a negative impact on the revenues of nonfarm enterprises operated by the left-behind.
Idioma originalInglés
Páginas (desde-hasta)208-241
Número de páginas34
PublicaciónReview of Development Economics
Volumen26
N.º1
Fecha en línea anticipada18 oct. 2021
DOI
EstadoPublicada - feb. 2022

Nota bibliográfica

Funding Information:
This research was conducted with financial and scientific support from the Partnership for Economic Policy (PEP) (www.pep-net.org) and funding from the Department for International Development (DFID) of the United Kingdom (or UK Aid) and the Government of Canada through the International Development Research Center (IDRC) This work was carried out with financial and scientific support from the Partnership for Economic Policy (PEP), which is funded by the Government of Canada through the International Development Research Centre (IDRC) and Global Affairs Canada (GAC), and the William & Flora Hewlett Foundation. [Correction added on 08 November 2021, after first online publication: Funding information has been updated in this version.]

Publisher Copyright:
© 2021 John Wiley & Sons Ltd

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