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A Case Study of Dhangadhi Municipality, Kailali IMPACT OF REMITTANCE ON HOUSEHOLD EXPENDITURE BEHAVIOUR (A Case Study of Dhangadhi Municipality, Kailali) A Thesis Submitted to the Central Department of Economics, Tribhuvan University, Kirtipur, Kathmandu, Nepal, In Partial Fulfillment of the Requirements for the MASTERS OF ARTS In ECONOMICS By: DHAN BAHADUR KATHAYAT Roll No. 102/066 Regd.No. 9-2-327-419-2006 Central Department of Economics, Tribhuvan University, Kirtipur, Kathmandu, Nepal January 19, 2016 RECOMMENDETION LETTER This thesis entitled "Impact of Remittance on Household Expenditure Behavior: A Case Study of Dhangadhi Municipality Ward Number 2, Kailali District" has been prepared by Dhan Bahadur Kathayat for partial fulfillment of the requirements for the degree of Master of Arts in Economics under my guidance and supervision. I fully approve this dissertation and forward it with recommendation for its approval. Prof. Kushum Shakya,Ph.D. Thesis Supervisor Central Department of Economics Tribhuvan University, Kirtipur Kathmandu, Nepal. Date: January 19, 2016 APPROVAL LETTER The dissertation entitled "Impact of Remittance on Household Expenditure Behavior: A Case Study of Dhangadhi Municipality Ward No 2, Kailali District" submitted by Mr. Dhan Bahadur Kathayat has been accepted as a partial fulfillment of the requirement for the Degree of Master of Arts in Economics. Dissertation Committee Prof. Dr. Ram Prasad Gyanwaly Head of the Department (External Examiner) Prof. Kushum Shakya Ph.D. (Thesis Supervisor) Date: January19, 2016 ACKNOWLODGEMENT I am greatly indebted to my supervisor Kushum Shakya, Ph.D. Professor, Central Department of Economics, Tribhuvan University, for her supervision, valuable guidance and encouragement to complete this study. I would like to express my sincere gratitude to Prof. Dr. Ram Prasad Gyanwaly, Head of Central Department of Economics who accepted the proposal and gave me opportunity to write this thesis. I am also thankful to all my honorable Professors and Lecturers/teachers and administration staff of Central Department of Economics for their support. I am also thankful to officials of different Government Departments, T.U Central Library and different agencies for providing me required information and relevant materials to prepare this research work. I am very much grateful to Mr. Siddha Raj Bhatta, Yogendra Paneru and Prakash Khadka for their valuable suggestions and cooperation during the course of preparing this thesis. I am deeply indebted to my parents and young brothers understanding moral support as well as financial support during my thesis completion period. Date: January 19, 2016 Dhan Bahadur Kathayat Table of Contents Page No. Recommendation Letter I Approval Letter II Acknowledgement III Table of Contents IV List of Tables VII List of Acronyms IX CHAPTER I: INTRODUCTION 1 - 7 1.1 General Background 1 1.2 Statement of Problem 3 1.3 Objective of the Study 5 1.4 Significance of the Study 6 1.5 Limitation of the Study 7 1.6 Organization of the Study 7 CHAPTER II: REVIEW OF LITERATURE 8 - 21 CHAPTER III: RESEARCH METHODOLOGY 22 - 25 3.1 The Research Design 22 3.2 Source of Data and Data Collection 22 3.3 Sampling Design 23 3.4 Data Processing 25 3.5 Data Analysis 25 CHAPTER IV: FOREIGN EMPLOYMENT AND REMITTANCE ECONOMY OF NEPAL 26 - 32 4.1 Foreign Employment 26 4.2 Growth Pattern of Labor Migration 27 4.3 Most favored Destinations of Nepalese Workers 27 4.4 Remittance 29 4.4.1 Growth of Remittance 29 4.4.2 Impact of Remittance to the National Economy 31 4.4.3 Conclusion 32 CHAPTER V: SOCIO-ECONOMIC AND DEMOGRAPHIC FEATURES OF THE TUDY AREA 33 - 41 5.1 Socio-economic Status of Sample Households 33 5.2 Introduction of the Study Area 33 5.3 Demographic Status 34 5.4 Status of the Foreign Employment 37 5.5 Age and Sex Distribution of the Population of the Study 38 5.6 Occupational Composition 39 5.7 Educational Status of the Study Area 40 5.8 Level and Sources of Income 41 CHAPTER VI: PRESENTATION AND DATA ANALYSIS 42 - 59 6.1 Composition and Pattern of Labor Migration 42 - 48 6.1.1 Causes for Seeking Foreign Employment 42 6.1.2 Cost Paid for Foreign Employment and Duration of Stay 43 6.1.3 Types of Jobs 45 6.1.4 Source of Financing 46 6.1.5 Income Earned from Foreign Employment 47 6.1.6 Use of Remittance 48 6.2 Impacts of Remittance Income on Different Indicators 50 - 55 6.2.1 Impact of Remittance on Income Status 50 6.2.2 Impact of Remittance on Occupation 51 6.2.3 Impact of Remittance on Education 52 6.2.4 Impact of Remittance on Size of Land Holding 53 6.2.5 Impact of Remittance on Health Care Seeking Behavior 54 6.2.6 Types of Housing 55 6.3 Impact of Remittance on Expenditure Behavior 56 - 59 6.3.1 Food Expenditure behavior 56 6.3.2 Educational Expenditure behavior 57 6.3.3 Investment on Land and Real -estate 58 6.3.4 Saving of Sample Households 59 CHAPTER VII: SUMMARY, CONCLUSION AND RECOMMENDATION 60 - 68 7.1 Summary of Findings 60 7.2 Conclusions 62 7.3 Recommendations 64 Appendix References LIST OF TABLES Table No. Title Page 3.1 Total Population and sample size of ward number 2, Dhangadhi Municipality, Kailali 24 4.1 Number of Nepalese migrant workers in different countries in FY 2003/04 to 2013/14 28 4.2Status of remittance in FY 2001/02 to 2013/14 30 4.3 Composition of GDP, Saving, Investment and Remittance in Nepal in FY 2002/03 to 2013/14 31 5.1 Ward wise population Distribution of the Study Area 35 5.2 Tole wise Population Distribution of the Study Area on the Basis of Different caste 36 5.3 Number of Migrant households and Population from this Municipality Ward Number 2 37 5.4 Age and Sex Distribution of the Population of the Study Area 38 5.5 Occupation Composition of the Households 39 5.6 Educational Status of Remittance Receiving Households 40 5.7 Level and Sources of Household's Income 41 6.1 Causes of Seeking Foreign Employment from Ward Number 2 of Dhangadhi Municipality 42 6.2 Cost paid for Foreign Employment and Duration of Stay in Foreign Country44 6.3 Types of Jobs Performing in Abroad 45 6.4 Source of Financing for the Foreign Employment 46 6.5 Income Earned in Abroad 47 6.6 Use of Remittance Income in Different Sectors 48 6.7 Impact of Remittance on Income Status 50 6.8 Impact of Remittance in Occupation 51 6.9 Impact of Remittance on Education 52 6.10 Distribution of Land among Sample Households 53 6.11 Health Care Seeking Behavior of Households 54 6.12 Types of Housing and Frequency Distribution of Sample Households 55 6.13 Annual Average Food Expenditure of RRHH 56 6.14 Annual Average Educational Expenditure of Households 57 6.15 Annual Average Investment of Remittance Receiving Households 58 6.16 Annual Average Saving of Households 59 ACRONYMS ADB : Agriculture Development Bank CBS : Central Bureau of Statistics CFE : Convertible Foreign Exchange GDP : Gross Domestic Product GON : Government of Nepal HH : Household IMF : International Monetary Fund KSA : Kingdom of Saudi Arabia MOF : Ministry of Finance MTOs : Money Transfer Operators NLSS : Nepal Living Standard Survey NPC : Nepal Planning Commission NRB : Nepal Rastra Bank NRN : Non Residential Nepalese PSM : Propensity Score Matching PCF : Private Capital Flows RRHH : Remittance Receiving Households SLC : School Leaving Certificate TU : Tribhuvan University UAE : United Arab Emirates UK : United Kingdom UNDP : United Nations Development Programme UNFPA : United Nations Fund for Population Activities USD : United State Dollar WB : World Bank .
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