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A COMPARATIVE STUDY BETWEEN REMITTANCE AND NON- REMITTANCE HOUSEHOLDS IN LAKHAURI VDC OF DHANUSHA DISTRICT A THESIS Submitted to the Central Department of Economics Tribhuvan University, Kirtipur, Kathmandu, Nepal in Partial Fulfillment of the Requirements for the Degree of Master of Arts in Economics By SHIV SHANKAR THAKUR Roll No.: 141/066 Central Department of Economics Tribhuvan University, Kirtipur, Kathmandu, Nepal 2070 1 A COMPARATIVE A COMPARATIVE STUDY BETWEEN REMITTANCE AND NON- STUDY REMITTANCE HOUSEHOLDS IN LAKHAURI VDC OF DHANUSHA BETWEEN DISTRICT REMITTANCE AND NON- REMITTANCE A THESIS Submitted to the Central Department of Economics Tribhuvan University, Kirtipur, Kathmandu, Nepal HOUSEHOLDS in Partial Fulfillment of the Requirements for the Degree of Master of Arts in Economics IN LAKHAURI VDC OF By DHANUSHA SHIV SHANKAR THAKUR Roll No.: 141/066 DISTRICT SHIV SHANKAR Central Department of Economics THAKUR Tribhuvan University, Kirtipur, Kathmandu, Nepal 2 2070 2070 3 LETTER OF RECOMMENDATION This thesis entitled A COMPARATIVE STUDY BETWEEN REMITTANCE AND NON-REMITTANCE HOUSEHODLS IN LAKHAURI VDC OF DHANUSHA DISTRICT has been prepared by Mr. Shiv Shankar Thakur under my supervision. I hereby recommend this thesis for examination by Thesis Committee as a partial fulfillment of the requirements for the Degree of MASTER OF ARTS in ECONOMICS. ………………………………….. Prof. Dr. Sohan Kumar Karna Thesis Supervisor Date ………………………. 4 APPROVAL SHEET We certify that this thesis entitled A COMPARATIVE STUDY BETWEEN REMITTANCE AND NON-REMITTANCE HOUSEHOLDS IN LAKHAURI VDC OF DHANUSHA DISTRICT submitted by Mr. Shiv Shankar Thakur to Central Department of Economics, Faculty of Humanities and Social Sciences, Tribhuvan University, in partial fulfillment of the requirements for the Degree of MASTER OF ARTS in ECONOMICS has been found satisfactory in scope and quality. Therefore, we accept this thesis as a part of said Degree. Thesis Committee …………………………………. Prof. Dr. Ram Prasad Gyanwaly Head of the Department ..……………………………….. Prof. Dr. R. K. Shah External Examiner ………………………………… Prof. Dr. Sohan Kumar Karna Thesis Supervisor Date…………………………. ACKNOWLEDGEMENTS 5 This thesis entitled “A Comparative Study between Remittance and Non-remittance Households in Lakhauri VDC of Dhanusha District” has been prepared for the partial fulfillment of the requirements for the Degree of Masters of Arts in Economics. I am pleased to take this opportunity to express my intense gratitude to my thesis supervisor, Professor Dr. Sohan Kumar Karna, Central Department of Economics for his valuable guidance, suggestion and encouragement, without which it was beyond imagination to bring this thesis in this form. Similarly, I am grateful to Professor Dr. Ram Prasad Gyanwaly, Head of the Central Department of the Economics for his valuable suggestion and guidance. I also feel privileged to express my gratitude to all the teacher of Central Department of Economics for their genial response to my quires. I would like to express my deep gratitude to my father, mother, sister and specially my brother Mr. Shiv Sagar Thakur for the economically support, the completion of this thesis would have been impossible without whole-hearted support and love. Finally, I would like to thank my friends Ashok Das, Binod Das, Surendra Kumar Das, Amit Kumar Mahato, Jaynath Sah, Yakendra Thapa, Bijay Kumar Mandal, Sovit Kumar Sah for their heartily co-operation and whole unit of the Dot Net Cyber & SPSS, Kirtipur for the technical support. Shiv Shankar Thakur February, 2014 TABLE OF CONTENTS 6 Page No. LETTER OF RECOMMENDATION i APPROVAL SHEET ii ACKNOWLEDGEMENTS iii TABLE OF CONTENTS iv LIST OF TABLES vii LIST OF FIGURES viii LIST OF ACRONYMS ix CHAPTER-ONE: INTRODUCTON 1-6 1.1 General Background 1 1.2 Statement of the Problem 3 1.3 Objectives of the Study 4 1.4 Significance of the Study 5 1.5 Limitations of the Study 5 1.6 Organization of the Study 6 CHAPTER-TWO: REVIEW OF LITERATURE 7- 20 2.1 Review of Theoretical Literatures 7 2.2 Review of Empirical Literatures 12 2.3 Review of Nepalese Case Study 18 2.4 Gap in the Literature 20 CHAPTER-TREE: RESEARCH METHODOLOGY 21- 24 3.1 Rationale for the Selection of the Study Area 21 3.2 Research Design 22 3.3 Nature and Sources of Data 22 3.4 Population 22 3.5 Sampling Design 23 7 3.6 Methods of Data Collection 23 3.7 Data Analysis 23 3.8 Tools of Analysis 24 CHAPTER-FOUR: PRESENTATION AND ANALYSIS OF SURVEY RESULTS 25- 45 4.1 Introduction 25 4.2 Average Family Size of Households 25 4.3 Educational Status of Households 26 4.4 Toilet Facility of the Households 27 4.5 Land Purchasing and Purpose of Land Purchasing of Households 27 4.6 Fuel Used for Cooking and Sources of Drinking Water 29 4.7 Delivery Place of Child Born and Vaccination 30 4.8 Access to Information 31 4.9 Decision Regarding Household’s Financial Transaction 31 4.10 Possession of Bank Account 32 4.11 Expenditure Pattern of Households 33 4.12 Expenditure on Education and Health 34 4.13 Business Ownership 35 4.14 Agriculture Land Holding and Annual Average Income from Agriculture 36 4.15 Major Destination of Migrant Workers 37 4.16 Expenditure to Migrate 38 4.17 Annual Remittance Income 39 4.18 Use of Remittance Income 39 4.19 Land Purchase before and after Receiving Remittance 42 4.20 Main Material of Floor before and after Receiving Remittance 42 4.21 Main Material of Roof before and after Receiving Remittance 43 4.22 Institution of Education before and after Receiving Remittance 44 4.23 Food Practices of Family Members before and after Receiving Remittance 44 4.24 Clothing Pattern of Family Members before and after Receiving Remittance 45 CHAPTER-FIVE: SUMMARY, MAJOR FINDINGS, CONCLUSION 8 AND RECOMMENDETIONS 46- 52 5.1 Summary 46 5.2 Major Findings 47 5.3 Conclusion 50 5.4 Recommendations 50 REFERENCES 53- 57 APPENDIX 58- 67 9 LIST OF TABLES Table No. Title Page No. Table 4.1 Educational Status of Household 26 Table 4.2 Toilet Facility of Household 27 Table 4.3 Fuel Used for Cooking 29 Table 4.4 Delivery Place of Child Born 30 Table 4.5 Regular Child Vaccination 30 Table 4.6 Access to Information 31 Table 4.7 Decision Regarding Household’s Financial Transaction 32 Table 4.8 Possession of Bank Account 32 Table 4.9 Expenditure Pattern of Households 33 Table 4.10 Annual Expenditure on Education 34 Table 4.11 Annual Expenditure on Health 35 Table 4.12 Owned Agriculture Land of the Household 36 Table 4.13 Major Destination of the Migrant Workers 38 Table 4.14 Expenditure to Migrate 38 Table 4.15 Annual Remittance Income 39 Table 4.16 Average Monthly Expenditure on Unproductive Sector 40 Table 4.17 Average Monthly Expenditure on Productive Sector 41 Table 4.18 Land Purchase before and after Receiving Remittance 42 Table 4.19 Changed in Floor of the House by Remittance 42 Table 4.20 Changed in Roof of the House by Remittance 43 Table 4.21 Changes in the Institution of Education by Remittance 44 Table 4.22 Changes in Food Practices of Family Members by Remittance 44 Table 4.23 Changes in Clothing Pattern of Family Members by Remittance 45 LIST OF FIGURES 10 Figure No. Title Page No. Figure 4.1 Average Family Size 25 Figure 4.2 Land Purchasing 28 Figure 4.3 Purpose of Land Purchasing 28 Figure 4.4 Business Ownership 35 Figure 4.5 Average Annual Income from Agriculture 37 LIST OF ACRONYMS 11 BOP Balance of Payments CBS Central Bureau of Statistics CEDECON Central Department of Economics DDC District Development Committee GDP Gross Domestic Production IMF International Money Fund MOF Ministry of Finance NRB Nepal Rastra Bank SSA Sub-Saharan Africa SPSS Statistical Package for Social Science UN United Nations UAE United Arab Emirates USA United States of America VDC Village Development Committee 12 CHAPTER-ONE INTRODUCTION 1.1 General Background The increased global integration and the enhancement in communication technology have facilitated the movement of labor from one country to another and, as a result, the flow of remittances started growing at a higher pace. While there is a moderate rise in remittances transmitted to developed countries, the remittances sent by migrants to developing countries has witnessed dramatic surge recently. This happened precisely after 1990s when the migration from developed countries in the north accepted many migrant workers from the poor south. The history of Nepalese working abroad started from the recruitment of Gorkha soldiers since April 24th 1815. On the conclusion of the Anglo-Nepali War (1812 to 1815), the British East India Company, impressed by the extraordinary bravery and fighting qualities of the Nepalese, raised the first Gorkha regiments. After the independence of India in 1947, six Gorkha regiments were allocated to the Indian Army while the remaining four to the British Army. With the Hong Kong handover to China and the overall reduction in the strength of British armed forces, the number of British Gorkhas was gradually reduced from 8,000 in 1997 to approximately 3,500 (Panday, 2005). However, with the drastic cut in the British and Indian Military recruitment and the opening of new job opportunities in overseas countries after 1973 young Nepalese started migrating to the Middle East, and other countries. Initially the Nepalese migrated through Indian labor exporting agencies; but now a day they are canalized through authorized and unauthorized agencies in Nepal. The government of Nepal sees this as a blessing in disguise for it not only absorbs the rising youth population of Nepal but also brings the badly needed foreign currency to the country. Thus, realizing the imperatives of the foreign employment in the economic growth of the country Government of Nepal introduced Foreign Employment Act in 2042 B.S.

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