and Gurung, 2002).

As a result of this “liberalization of international migration”, the share of international migrants opting for these newer destinations increased dramatically between census years 1991 and 2001. Although there was a modest increase in the number of absentees between 1991 and 2001, migrants per 1000 population actually declined from 35 to 32 between 1991 and 2001 (see Figure 1). In terms of the composition however, whereas 90 percent of those absent from home were in India in 1991, the share had dropped to 75 percent in 2001. During the same period, the fraction of migrants that were in the Middle East increased from 1 percent to 12 percent and the fraction of migrants that were in East Asian countries went up from roughly 2 percent to 4 percent. (Figure 2).

Historically, the primary reason for migration out of Nepal has been inadequate round the year employment within the villages. This is also reflected in the stated reasons for migration in the most recent censuses. In 1991, 61 percent of the population absent from home were away seeking employment. This number had increased to 78 percent in 2001 (see Table 1). Given the cultural practice of patrilocal exogamy, it is not surprising that dependency or migration after marriage is the second largest self-reported reason for migration. While 95 percent of all international migrants seeking work were in India in 1991, the number had declined to 75 percent in 2001. In contrast, the Middle East which hosted 1 percent of all employment-seeking international migrants in 1991 was hosting 18 percent in 2001. There was a similar increase for East Asia as well.

There are two distinct aspects of this diversification of international migration destinations in Nepal that are highly important for us in this paper. The first is the large difference in the magnitude of wages that migrants could expect to earn in these newer destinations in comparison to the “traditional” destinations that were mostly urban areas within Nepal and Indian cities. Although wage data are not available, this is somewhat manifest in the average value of transfers made by migrants from these regions. Statistics from the national living standards survey conducted in 1995 show that the average annual transfer made by a migrant to regions outside India was Rs.79,183. The corresponding figures for urban Nepal and India were Rs.15,294 and Rs.10,532 respectively.<sup>7</sup> At the macroeconomic level, the increase in remittance inflows resulting primarily from the diversification of international destinations has been dramatic. Official statistics show that remittance receipts increased from 5 percent of GDP in 1995 to about 14 percent in 2003 (see Figure 3) propelling Nepal to the fifth position in the list of top remittance receiving countries.

The second aspect of the diversification of destinations that is equally salient is that it weakened the importance of traditional social institutions and overall “social capital” on opportunities

> 7This point however needs to be caveated as remittances are just as much a function of the cost of living at the destination and the cost of migration itself as they are a function of the wages. Migrating to cities within Nepal - and to a large extent across the open border to India as well - is not very expensive in comparison to the costs of migrating to these newer international destinations. Acquisition of travel documents, visas as well as up-front facilitation fees payable to manpower agencies responsible for work placements often range between Rs. 55,000-Rs. 80,000 - or roughly the average amount migrants to these regions remit in a year. But since the labor contracts typically run for a 3-5 year period, a typical migrant can expect to recover this investment in roughly a quarter of his time abroad.

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