Labour migration and investments by remaining households in rural Nepal

Existing studies on the development effects of labour migration and remittances provide conflicting evidence and many suffer from self-selection bias. Furthermore, in spite of the significance of labour migration to the Nepalese economy, there are very few studies that formally analyse the development effect of labour migration in this region. Consequently, propensity score matching and a 'difference-in-difference' method is used to estimate the effect of labour migration and expectations to receive remittances from these migrants on investments by the remaining households in Chitwan, Nepal. The results suggest a positive role of labour migration and their likelihood of sending remittances on investments in agriculture, a type of productive investment. © 2012 Springer Science+Business Media Dordrecht.