Nepal experienced considerable poverty reduction over the last two decades. It’s poverty headcount reduced from 63.8% in 1995 to 30.8% in 2010, according to the 2010 national poverty line, and even lower to 25.2% in 2010. However, over the same period, several factors including low economic and agricultural growth, weak public infrastructure, continued exclusion of disadvantaged groups, and conflict and other shocks prevented households from escaping poverty, or pushed households which had escaped back into poverty.
The focus of this report is on household poverty escapes and what explains why some households escape poverty and remain out of poverty (sustainable poverty escape, or resilience), while other households escape poverty only to fall back into poverty (transitory poverty escape) and still other descend into poverty for the first time (impoverishment). This document combines analysis from three rounds of the panel component of NLSS with qualitative research approaches, in particular, key informant interviews, life histories, and participatory wealth ranking to further investigate the drivers of sustained and transitory poverty escapes and of impoverishment. The report investigates the resources (land, livestock, and value of assets), attributes (household composition and education level), and activities (including jobs and engagement in non-farm activities) of households that enable them to build their resilience to sustainably escape poverty and minimize the likelihood of them falling back into poverty or descending into poverty for the first time.
Key findings suggest that in Nepal, the following factors contribute to sustainable poverty escapes:
1. Building the initial household resource base
2. Improving household and personal attributes and capacities
3. Reducing the risks associated with single-source economic activities
4. Managing and mitigating the effects of shocks and stresses
Author: Vidya Diwakar
Note: This report is accompanied by a Policy Implication Brief, which presents policy implications for sustaining poverty escapes in Nepal that emerge from the analysis presented in this study
Sustained and transitory escapes from poverty in Nepal
This report is part of the Resilience and Poverty Escapes project, supported by: