Education is an important determinant of long-term economic and social development, and many
developing countries policies are aimed at increasing schooling. The success of these policies partly
depends on accessibility of high-skilled jobs relative to low-skilled jobs. By lowering the rate of return to
education and increasing opportunity cost of staying in school, an abundance of low-skilled jobs could
reduce schooling. One source of low-skilled job growth in Nepal is low-skilled migration. This paper
estimates the extent to which low-skilled migration opportunity has reduced schooling in Nepal. Utilizing
Nepal Census data and Instrumental Variables method to account for endogeneity of migration, I estimate
the causal impact of greater migration opportunities by comparing schooling attainment across villages
with different migration rates. I find that a one percentage point increase in village-level migration rate
reduced the likelihood of obtaining upper secondary schooling by 3-6 percent. This demonstrates that
TLM could reduce long term economic growth due to its negative impact on schooling, thus drawing
attention to a possible trade-off between short-term poverty alleviation and long-term impacts of TLM.
Another implication for developing countries with low-skilled migration is that any policy aimed at
improving schooling should take into account incentives created by such migration opportunities. Further,
this study expands the literature on migration by highlighting the influence of community-level migration
on individual decisions.