specific employer. Family members do not accompany the migrants unless they have a work-visa of their own. It is rare for these migrants to settle permanently in the destination countries.

The process of finding jobs in these destination countries is heavily intermediated. Potential migrants typically contact (or are contacted by) independent local agents that link them to recruitment firms, popularly known as “manpower companies”, in Kathmandu. These local agents are typically fellow villagers with good contacts to the manpower companies and gather people for foreign employment from their own or neighboring villages. In addition, most of them also help potential migrants obtain passports and other related travel documents. The manpower companies in Kathmandu receive job vacancies from firms (or employment agencies) abroad. The manpower companies are responsible for screening (if at all) and matching individuals with demands for workers from abroad, processing contracts, obtaining medical clearances, arranging for travel, visa and other paperworks including obtaining necessary clearances from the Department of Foreign Employment (DoFE) for employment abroad.

# **2.2 Data on migration flows**

The data on migration outflow comes from the Department of Foreign Employment (DoFE) that keeps a record of permits issued for work abroad. DoFE, a department under the Ministry of Labor, was established in December 2008 specifically to handle the processing and issuing of labor permits for Nepali workers with an employment contract in these destination countries. As discussed above, obtaining labor permits is mandatory for every work migrant from Nepal to these destination countries. I have individual level data (without personal identifiers) on all these registered work-migrants from 2009 to 2013. I observe the date of permit, district of residence, destination country, age, gender, contracted wages, fees paid, and occupation for each permit issued. I restrict my analysis to top 6 countries (Malaysia, Qatar, Saudi Arabia, United Arab Emirates, Kuwait and Bahrain) that cover more than 98 percent of all the permits issued by DoFE.

The sample I use consists of 1.34 million permits issued from January 2009 to December 2013. These migrants are predominantly male (98 percent) and quite young. Almost all migrants are aged 18-45 with an average age of 27 years. During this period, Malaysia led other countries as the most popular destination choice with over 9,000 permits being issued every month. As Figure 2 shows, outflow of migrants is increasing in recent years for most destinations. By 2013, over 1,100 migrants were leaving the country per day with 40 percent going to Malaysia, 25 percent to Qatar and 20 percent to Saudi Arabia.

I aggregate this data up to the level of district-destination-month cells by taking the counts of migrants (for total outflow), and means for wages, fees and occupation choices. As Table 2 shows, the average migrant outflow per district per month per destination is 50 (top panel, column 1). The average reported monthly wage in the data is $230 with average fees paid to intermediaries of $580. The average monthly wages rose from $200 in 2009 to $270 in 2013, which, combined with the rise in US dollar exchange rate, led to an increase of 60 percent over the period (middle panel, columns 3 and 5). Similarly, fees charged fell (in Nepali rupees) by 18 percent over the duration (middle panel, columns 4 and 5). A large share (53 percent) of the migrants reported their occupation as ‘labor’ which probably refers to manual work possibly in construction sectors. Since it is not possible to 5