Remittances, Structural Inequality, and Multidimensional Poverty in Nepal

Abstract

Despite the rapid growth of remittances in Nepal, their impact on multidimensional poverty remains uneven and insufficiently understood, particularly in the presence of structural inequalities. This study examines how remittances influence poverty incidence, depth, severity, and food and non-food deprivation using data from the Nepal Living Standards Survey IV (2022/23). Grounded in the Network Theory of Migration and the New Economics of Labor Migration (NELM), and extended through a social economics perspective, the analysis emphasizes how structural inequalities and institutional constraints shape migration and remittance outcomes. Empirically, instrumental variable (IV) estimation and propensity score matching (PSM) are employed to address endogeneity and selection bias. The results show that remittances significantly reduce multiple dimensions of poverty. However, these effects are not uniform, as migration is a selective process shaped by unequal access to resources, networks, and infrastructure. The findings highlight that remittances are socially embedded processes, requiring policies that address structural inequalities for inclusive poverty reduction. © 2026 The Association for Social Economics.