Migration and remittances during the period of civil conflict in Nepal

This dissertation explores the causes and consequences of migration and remittances in Chitwan district of south-central Nepal during the civil conflict that occurred between 1996 and 2006.;First, it investigates the deterring effect of violence on migration using a monthly panel dataset from western Chitwan. The existing literature on forced migration appears to take it as given that violence always forces people to leave and also limits our understanding of how violence affects migration to competing destinations. The dissertation therefore adds to the literature on forced migration by studying how armed violence during a period of civil conflict in south-central Nepal influenced the likelihood of local, internal, and international migration. The results show that violence has a nonlinear effect on migration, such that low-to-moderate levels of violence reduce the odds of movement but when violence reaches high levels the odds of movement increase. In addition, the effect of violence on mobility increases as the distance of the move increases. The effects of individual and household level determinants were mostly consistent with hypotheses derived from contemporary theories of voluntary migration and no predictor of migration influenced the decision to migrate differently in the presence of violence.;Second, it explores what motivates people to remit. As remittances have become a crucial source of income for households, migrants' motivations to remit have significant implications for migrant-sending societies. Using two different datasets from western Chitwan, I test the relative significance of altruism, semi-altruism, and self-interest motives along with other likely determinants of remittance behavior. An improved statistical methodology corrects for potential self-selection bias. The empirical results suggest that remittance behavior is driven by self-interested motives for inheritance and future intentions to return home rather than semi-altruistic or pure altruistic motives. The results have significant policy implications.;Third, the dissertation assesses the development impact of migrant remittances on remittance-recipient society. Existing studies that measure the development effects of migrant remittances provide conflicting evidence and many suffer from self-selection bias. Furthermore, in spite of the significance of migrant remittances to the Nepalese economy, there are very few studies that formally analyze the development impact of remittances in this region. I therefore use propensity score matching and a difference-in-difference method to estimate the impact of remittances from labor migrants on productive and non-productive investments by remittance-recipient households in Chitwan.;The results suggest a positive role of remittances on investments in agriculture, which supports the New Economics of Labor Migration theory that in the imperfect market environments, remittances help to loosen constraints on productivity. Furthermore, given favorable prospects for agriculture and higher rates of return from farming in Chitwan, the results imply that when people find productive investment opportunities, they choose to channel their remittances towards such investments rather than on non-productive activities.;Finally, relevant accounts from a series of qualitative interviews conducted with key informants in Chitwan are used to supplement the empirical results.