The Caste/Ethnic Bases of Poverty Dynamics: A Longitudinal Analysis of Chronic and Structural Poverty in Nepal

This paper examines poverty dynamics and their socioeconomic determinants between 1996 and 2011 in Nepal. With chronic and structural poverty headcount ratios of around 17 per cent, poverty is mostly transient and stochastic affecting up to four-fifths of the population. Descriptively, indigenous Janajatis and lower caste Hindus exhibit the highest rates of chronic and structural poverty. Panel data models suggest significant roles of human capital and household assets in determining poverty, however, with the evidence of caste/ethnic penalty limited mostly to Janajatis. Findings provide important insights into the structure and determinants of poverty dynamics, helping to rethink policies to address them.