Environmental migration and labor markets in Nepal

Environmental migration and labor markets in Nepal

This discussion paper focuses on how migration impacts the labour markets of receiving communities in developing countries. 

It investigates the impact of weather-driven internal migration on labour markets in a post-conflict country, Nepal, using household survey data in 2003 and 2010. In this period, 3 per cent of individuals moved out of their district of origin during the four years preceding each survey round. The researchers found that prevailing environmental and conflict factors entice workers with positively selected attributes (such as education and skill) to migrate. Marked skill differences between migrants and the native population render wage effects in the formal sector: an increase of 1 percentage point in migration reduces wages in the formal sector by 4.8 percentage points. The absence of wage effects in the informal sector is consistent with the exit of low-skilled native workers from the labour market.

 

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