Impact of remittances on household health care expenditure: Evidence from the Nepal Living Standards Survey

This paper examines the effect of remittance inflows on health care expenditure in Nepal using the Nepal Living Standards Survey 2010-2011. Using the recursive three-stage least square regression method, the propensity score matching method, and the Oaxaca-Blinder decomposition method, we find a positive and significant effect of remittances on health care expenditure. In particular, our analysis shows a 0.099% increase in health care expenditure for every 1% increase in overall remittances. This effect increases to 0.189% for earned remittances (remittances received from a household member). We also find that remittance-receiving households with at least one migrant family member have different health care spending behavior than those with no migrant members.