Trends and Drivers of Poverty Reduction in Nepal
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World Bank, Washington, DC
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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.
Palabras clave
poverty, migration, remittances, labor income, demographics