Impact of remittance on school enrollment in Nepal: An empirical analysis through the ARDL approach

Abstract

Education is widely recognized as a fundamental driver of socio-economic development and individual empowerment. Researchers and policy makers have discussed the international migration and development nexus from a variety of perspectives. Despite the multidimensional effects of education on development, the relationship between remittance and school enrollment is not sufficiently studied yet in Nepal. Therefore, the major objective of the study is to investigate the effects of foreign remittance on school enrollment in Nepal. The ARDL bounds testing model is employed in this study to uncover the relationship between primary school enrollment (SENROL) and foreign remittance (REMI) in Nepal. The time series data for 31 years, spanning from 1993 to 2023, are collected from various secondary sources like economic survey published by Ministry of Finance (MOF), quarterly economic bulletins published by Nepal Rastra Bank (NRB). The empirical results show a positive and statistically significant relationship between remittance inflow and school enrollment, signifying that remittance inflows play a crucial role in enhancing household investment in education. Conversely, the number of schools exhibits a negative and significant impact on enrollment in our study. The number of teachers, however, shows no significant effect on enrollment. The inflow of remittance supports for school enrollment in Nepal. These findings underscore the importance of channeling remittance income effectively in education and improving policy alignment between infrastructure expansion and educational outcomes.