This paper utilizes the third wave of Nepal Living Standard Survey to assess the causal impact of parental absence and remittances on educational investment of children left behind. Unlike previous studies, we separately identify parental... more
This paper utilizes the third wave of Nepal Living Standard Survey to assess the causal impact of parental absence and remittances on educational investment of children left behind. Unlike previous studies, we separately identify parental absence and remittances with careful consideration of self-selection into migration and endogeniety of remittances. Using two-step estimation strategy, we show that parental absence has substantive disruptive effect on child education while remittances has positive effect. In addition, we also show that non-parental absence has negative effect on education but effects are not significant. Further, we provide supporting evidence about the channels to disruption. Finally, we also show some heterogeneity results by child gender and mother's education. The results by child gender confirm that remittance relaxes liquidity constraint of households by investing on girl’s education. Further, the results by mother education provide evidence that educated mother can play a role to neutralize or mitigate the negative effects of parental absence.
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There have been rising concerns on growing magnitude of Underground Economy in most of the economies irrespective of their state of development. The problem is more apparent in developing economies where legal and institutional... more
There have been rising concerns on growing magnitude of Underground Economy in most of the economies irrespective of their state of development. The problem is more apparent in developing economies where legal and institutional arrangements are relatively weaker. This study attempts to estimate empirically the size of Underground Economy in Nepal. We use an indirect method of customized version of Currency Demand Method to measure the same and find that its coverage has been increasing throughout in the last two decades with the most alarming increment in the last two fiscal years 2011and 2012. We attribute these increments particularly to the 1996-2006 armed conflict; the increasing cases of economic and financial crimes; and a large informal sector.