Is emigration of workers contributing to better schooling outcomes in Nepal?

• Author: Liang Choon Wang,Gaurav Datt,Samia Badji
• DOI: http://doi.org/10.1111/roie.12481
• Published date: 01 September 2020
• Date: 01 September 2020

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wileyonlinelibrary.com/journal/roie Rev Int Econ. 2020;28:1046–1075.

© 2020 John Wiley & Sons Ltd

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INTRODUCTION

The growth of international migrants worldwide has been accelerating, from an annual rate of 1.2%

between 1990 and 2000 to 2.3% since 2000. In 2017, more than 258 million individuals (represent-

ing 3.4% of the world population) left their home country to live or work in another region (United

Nations,2017). More often than not, migrants send money back to their family members in their coun-

try of origin. The amount of remittances sent back home is astounding. With USD 450 billion sent in

2017 (World Bank,2017), remittances are by far higher than official development assistance (ODA)

which reached USD 143 billion in 2016 (OECD,2017). Given the scale of migration and the magni-

tude of dollars sent home, there has been a persistent interest in analyzing the impact that such a large

scale phenomenon can have in migrant-sending economies. While most of the literature has found

positive effects of migration on poverty reduction and growth in sending areas (Acosta, Fajnzylber, &

Received: 8 May 2019

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Revised: 22 March 2020

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Accepted: 23 April 2020

DOI: 10.1111/roie.12481

ORIGINAL ARTICLE

Is emigration of workers contributing to better

schooling outcomes in Nepal?

GauravDatt1

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Liang ChoonWang1

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SamiaBadji2

1Department of Economics, Centre

for Development Economics and

Sustainability, Monash University, Clayton,

VIC, Australia

2Centre for Health Economics, Monash

University, Caulfield East, VIC, Australia

Correspondence

Gaurav Datt, Department of Economics,

Centre for Development Economics and

Sustainability, Monash University, Clayton,

VIC 3800, Australia.

Email: gaurav.datt@monash.edu

Abstract

This paper presents evidence on how emigration for work

affects schooling outcomes for primary and secondary

school-age children in Nepal. Using an instrumental vari-

able strategy exploiting past migration network, we show

that the identified effects critically depend on how school-

ing outcomes are measured. While conventional measures

of school attendance indicate no impact, our new set of

schooling status and schooling gap measures reveals sig-

nificant impacts. Schooling status measures reveal favora-

ble impacts for girls, and for emigration to India. Schooling

gap measures reveal favorable effects of all emigration on

schooling outcomes for girls and of emigration to other

countries for boys.

JEL CLASSIFICATION

I24; I25; J61; O15

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DATT eT Al.

Lopez, 2007; Adams & Page,2005; Cooray,2012; Giuliano & Ruiz-Arranz,2009; World Bank,2006;

Ziesemer,2012) recent analyses and surveys highlight that impacts on human capital investment, and

educational investment in particular, are not necessarily positive (Antman,2013; Démurger,2015).

In the large literature focusing on schooling outcomes, while some studies have found no (or in some

cases negative) impact, others find significant positive effects, but there is considerable heterogeneity

across subgroups of households, migrants, and children.1

In part, the heterogeneity reflects the different channels through which migration influences school-

ing outcomes. The literature identifies four key channels: higher remittances, altered expected returns

to schooling, altered decision-making within the household, and changes in time allocation among

household members. Remittances relax the budget constraint and can have positive income effects on

schooling outcomes of children (Amuedo-Dorantes & Pozo,2010; Calero, Bedi, & Sparrow,2009).

The prospects of higher earnings through migration can change the expected returns to schooling

positively or negatively depending upon how far the migration opportunity reward higher or lower

skills (Beine, Docquier, & Rapoport,2001, 2008; de Brauw & Giles,2017; Katz & Rapoport,2005;

Mountford,1997). Migration alters the axes of decision-making within the household, often giv-

ing women a greater role when it is mostly the men who migrate (Bouoiyour, Miftah, & Mouhoud,

2016; Cortes,2015). Finally, the absence of an able adult household member can alter time allocation

within the household, including children's time in educational pursuits (Coon,2016; Meyerhoefer

& Chen,2011). The overall effect of emigration on children's education is thus both theoretically

indeterminate and empirically diverse depending upon the relative strengths of the different forces at

play. However, given the scale of migration, the question of whether and how education is affected by

emigration is of tremendous importance.

A particular feature of the empirical literature on this topic is that a large share of studies have fo-

cused on relatively simple measures of schooling such as school attendance or enrollment.2 However,

simple enrollment-based measures of schooling can be quite limited in various ways. In some envi-

ronments, school enrollment rates are already quite high and it may be difficult to pick up additional

effects of migration on enrollment. So, it may be important to focus on how children are progressing

through school. More generally, school attendance is a poor measure of educational achievement.

School enrollment can hide different dynamics occurring among both current attendees and non-at-

tendees; for instance, while the numbers of children out of school could decline, those in school could

be progressing poorly as a result of inadequate learning.3 In such contexts, enrollment can be quite

misleading in assessing the overall impact of migration on schooling performance.

In this paper, we examine whether emigration is contributing to better schooling outcomes of 6

to 14-year-old children in Nepal using a wider range of schooling outcome variables. In addition to

school attendance, we investigate effects on four mutually exclusive measures of schooling status

and three schooling deprivation indices for boys and girls. Using two waves of nationally represen-

tative household survey data, we estimate the effects of emigration to India and the rest of the world

in a district fixed-effects instrumental variable framework. Our instrumental variable exploits past

distribution of overseas migrant networks and country-specific variations in emigrants over time to

identify the effects of emigration to India and the rest of the world on educational outcomes measured

at the locality (primary sampling unit) level. The four mutually exclusive schooling status measures

relate to prevalence rates for children who have never attended school, those who have dropped out,

those straggling (lagging behind age-appropriate grade), and those progressing normally. For our

three schooling deprivation indices, we use the schooling gap measures proposed by Datt and Wang

(2020) that build in the size and distribution of schooling deficits across children.

A key message of the paper is that the measurement of schooling outcomes can be as crucial as

the empirical strategy for identifying impact. In particular, we highlight the importance of going