Remittance-driven migration in spite of microfinance? The case of nepalese households

Bishal Kasu, Ernesto Castañeda, Guangqing Chi

Research output: Chapter in Book/Report/Conference proceedingChapter

1 Scopus citations


Many poor households in the developing world supplement their limited incomes with remittances and microfi nance. Much of the literature assumes upward social mobility and economic development from increased household expenditures in nutrition, health, education, and housing driven by remittances and/or microfi nance. Th e New Economics of Labor Migration theory states that, faced with limited access to local capital, credit, and insurance products, working-age people may emigrate to increase their household income, but what happens when people emigrate from rural communities that increasingly have access to credit through microfi nance? Th is chapter investigates the simultaneous impact of microfi nance and remittances on the livelihood of Nepalese people by using the 2003-2004 Nepal Living Standard Survey. We fi nd that microfi nance is positively associated with an increase in the proportion of household income used for health-care expenses and negatively associated with the percentage of income used for food expenses and housing improvements. Remittances are positively associated with increased expenses for children’s basic education and negatively associated with higher percentages of household income going toward food expenses. Th e models presented control for social factors such as gender, caste, and ethnicity; education and marital status of the household head; and the number of dependents. Th e fi ndings and discussion provide insights into the nexus of microfi nance, remittances, and livelihoods. An interesting gendered dynamic appears in some households where women apply for microcredit, which they pay for with remittances sent by male household members.

Original languageEnglish (US)
Title of host publicationImmigration and Categorical Inequality
Subtitle of host publicationMigration to the City and the Birth of Race and Ethnicity
PublisherTaylor and Francis
Number of pages26
ISBN (Electronic)9781351585910
ISBN (Print)9781138107175
StatePublished - Jan 1 2017

All Science Journal Classification (ASJC) codes

  • Social Sciences(all)


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