The historical migrant networks are extensively used in the literature to estimate current levels of migration. Migrant networks, which are ties between migrants, former migrants, and non-migrants at the origin through bonds of kinship, friendship, and shared community origins, might be the most important mechanism for international migration (Massey, 1988). Sociologists and anthropologists have been studying the role of networks on migration for a long-time (Tilly and Brown, 1967; Mitchell, 1969; Choldin, 1973; Hugo, 1981) and economists have also found that networks play an important role in migration decisions (Hägerstrand, 1957; Greenwood, 1969; McKenzie and Rapoport, 2007; Woodru and Zenteno, 2007; Foged and Peri, 2013). This is because migrant networks reduce the potential hazards at both the destination and the origin and decrease the cost of relocation (Massey, 1988; McKenzie and Rapoport, 2007).

Historically, international migration networks are region specic in Nepal. For example, most of the people joining the Indian and British armies in the 1930's (and up to the present day) were Gorkhas from the Pokhara region when the recruitment started. Similarly, people from the southern plains migrated after the beginning of the extensive cultivation of tea in northern India (Seddon et al., 2001). People from Far-Western villages in Nepal tend to migrate to the same destination in India as their co-villagers (Thieme, 2006). Figure (A.3) shows the top 10 origin districts for laboremployment migration at present. These top districts, which are located mostly in South-Eastern Terai, account for 36.5% of the total labor-related migration from Nepal between 2008 and 2014.

In order to investigate the role of past community level migration on current levels of migration in the community, I calculate the shares of migrants in 2001 and 2011 to a particular destination country from a VDC using the 2001 and 2011 Nepal Censuses. Then, for each destination country, I regress the share of migrants to the destination from a VDC in 2011 on the share of migrants from potential treatment and _z_ be an instrument, then under the assumptions of independence, exclusion and monotonicity IV is a LATE. Independence assumption states that dierence in outcome ( _y_ ) and dierence in treatment ( _d_ ) between _zi_ = 0 and _zi_ = 1 should capture the causal eect of the instrument on outcome and treatment. This is satised when as good as randomly assigned condition in IV is fullled. The exclusion assumption, _y_ ( _di, zi_ = 0) = _y_ ( _di, zi_ = 1) for _di_ = 0 _,_ 1 , is the same as the exclusion criteria condition in IV. Whereas, the monotonicity assumption states that the instrument, if it has any eect, should aect everyone in the same direction i.e. _d_ 1 _i ≥ d_ 0 _i_ or _d_ 1 _i ≤ d_ 0 _i_ . Given these assumptions, _IV_ = _LATE_ = _E_<sup>_E_</sup> (<sup><u>(</u></sup> _d_<sup>_<u>yi</u>_</sup> _i_<sup>_<u>|</u>_</sup> _|_<sup>_z_</sup> _z_<sup>_<u>i</u>_</sup> _i_<sup>=1</sup> =1)<sup><u>)</u></sup><sup>_−_</sup> _−_<sup>_E_</sup> _E_<sup><u>(</u></sup> (<sup>_<u>y</u>_</sup> _d_<sup>_<u>i</u>_</sup> _i_<sup>_<u>|</u>_</sup> _|_<sup>_z_</sup> _z_<sup>_<u>i</u>_</sup> _i_<sup>=0</sup> =0)<sup><u>)</u>=</sup><sup>_E_(</sup><sup>_y_1</sup><sup>_i−y_0</sup><sup>_i|d_1</sup><sup>_i>d_0</sup><sup>_i_).Noticethatthedenominatoris</sup> just the shares of compliers i.e. the percentage of the sample that participate in the treatment only because of the instrument. So, when there is treatment eect heterogeneity, IV estimates the causal eect of treatment on outcome only among compliers. In our case, compliers are those who decide to migrate due to the higher share of migrants in the community in the past. Since all three assumptions are likely to be satised, the estimated IVs in the paper are LATEs. Contrarily, under the homogeneity assumption or perfect compliance, the denominator would be 1 and hence, LATE = IV = ITT (intention to treatment eect), which is what OLS assumes. Since the share of compliance is always less than or equal to 1, the LATE is always greater than the ITT.

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