Trends and Drivers of Poverty Reduction in Nepal: A Historical Perspective

37 Pages Posted: 7 Oct 2016

See all articles by Hiroki Uematsu

Hiroki Uematsu

World Bank

Akhmad Rizal Shidiq

Leiden University

Sailesh Tiwari

World Bank; Brown University - Department of Economics

Date Written: September 21, 2016

Abstract

Nepal made remarkable progress in poverty reduction between 1995 and 2010, a period coinciding with a decade-long violent conflict followed by tumultuous post-conflict recovery. Although improving agricultural productivity was long regarded as instrumental to lifting the living conditions of Nepal's impoverished rural areas, a bulk of the observed poverty reduction has come as a result of exogenous improvements in economic opportunities for poor Nepalis outside Nepal's borders. About 50 percent of the poverty reduction witnessed between 1995 and 2010 was associated with growth in labor incomes, particularly in nonagricultural activities. Private remittance receipts account for a little over a quarter of the total poverty reduction seen in Nepal. This is consistent with increased nonfarm diversification of rural households as well as the increase in nonfarm wages over the period. Household demographic changes, brought about by a sharp decline in fertility rates and the changing dependency structure as a result of migration, have also played an important role.

Keywords: Small Area Estimation Poverty Mapping, Poverty Assessment, Inequality, Poverty Monitoring & Analysis, Poverty Impact Evaluation, Poverty Diagnostics, Poverty Lines

Suggested Citation

Uematsu, Hiroki and Shidiq, Akhmad Rizal and Tiwari, Sailesh, Trends and Drivers of Poverty Reduction in Nepal: A Historical Perspective (September 21, 2016). World Bank Policy Research Working Paper No. 7830, Available at SSRN: https://ssrn.com/abstract=2849131

Hiroki Uematsu (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Akhmad Rizal Shidiq

Leiden University

Postbus 9500
Leiden, Zuid Holland 2300 RA
Netherlands

Sailesh Tiwari

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

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