This rapid review synthesises findings from a rigorous academic, practitioner, and policy references published in the past 10 years that discuss livelihood options and pathways out of poverty for households in Nepal. The World Bank (2016) highlights that in 1991, circa 40% of the Nepali population were identified as poor. Further rounds of the Nepal Living Standard Surveys (NLSS) record a declining poverty headcount rate: 42% in 1995, 31% in 2003, and 25% in 2010 (World Bank, 2016: 3). Similarly, Oxford Poverty and Human Development Initiative (OPHI, 2018) report continuous progress has been made in reducing multidimensional poverty which has halved from 2006 to 2014.
Whilst Nepal has experienced good economic growth and substantial poverty reduction, neither have been equitable. Incomes have grown faster for the rich than for the poor and certain groups
and regions experience greater poverty. It is also important to note that future pathways out of poverty will depend on the rate of economic growth, the content of that growth process, as well
as government policies. Despite these caveats, it is apparent that many have left poverty, and the poor are less poor than before.
The literature surveyed in this report highlights livelihood diversification to non-farm activities as common among rural households and playing a pivotal role in poverty reduction. This review
notes that pathways out of poverty in Nepal are characterised by ‘occupational multiplicity’, ‘multiple job holding’ or ‘diversified livelihoods’. The World Development Report identified three
pathways out of rural poverty: commercial farming, labour and migration (World Bank, 2008), suggesting that exiting farming and pursuing non-farm options lifts the rural poor out of poverty.
In the Nepali context, livelihood strategies have been broadly characterised as follows:
- Purely agriculture;
- Agriculture plus self-employment in non-farm activities;
- Agriculture plus wage in non-farm employment;
- Agriculture plus both wage and self-employment;
- Purely non-agriculture, i.e. households engaged purely in non-farm activities (it could be self or wage employment or both in non-farm, activities).
While a number of potential pathways out of poverty are available, not all rural poor can access these due to specific social and market relations. The poor are not homogenous and can be
differentiated along geographic, caste, gender, ethnicity and asset-holdings lines. Households in different social positions and with different economic capabilities participate differently in the nonfarm markets and achieve different benefits. The individual agency also plays an important role. As a body of literature, the papers suggest that education, training, landholding, access to credit,
proximity to infrastructure and markets, and agro-ecological location are the major influencing factors in the adoption of higher returning livelihood strategies.
Evidence on the role of gender and pathways out of poverty is more mixed: some commentators find that males dominate the non-farm sector, while others observe that in certain types of nonfarm activities, women are more heavily represented than men. Further to this, discussions with teachers and students in Khotang revealed that quality of education is low because female
students have little time to study. This is because they are needed to share the workload of their mothers, which has increased because of the migration of fathers and male students, many of
whom leave school after eighth grade to go abroad for work.
This review also identified evidence gaps, including analyses of certain (more remote) regions and discussions of urban poverty. Given the prevalence of poverty in rural areas, this review has
prioritised reports that discuss livelihoods and pathways out of poverty in a number of settings.
