Assessing the Effects of Remittances on Human Capital in Nepal
- Apoorva LalDetails
Abstract
I intend to illustrate the mechanisms through which unskilled labour migration and our public school system damage Nepal's long term human capital, which in turn gravely hurts our long term economic prospects. First, I will argue that unskilled labour migration has largely neutral and potentially harmful effects on Nepal's human capital because it doesn't incentivise further education. This is especially problematic considering the accelerating rate of industrial automation, which will increasingly obviate the need to employ unskilled and semi-skilled labourers. An additional hurdle is the dysfunctional nature of Nepal's public school system, which is extremely poor at producing skilled labour. The combined effect of these two factors is deeply detrimental to Nepal's long term economic prospects. I conclude emphasising the need for a dynamic and cogniziant turn in economic policy that departs from the deeply outmoded treatment of the Nepali population as agrarian and sedentary in order to avert trouble for the Nepali economy in the future.