Income and Wealth Inequality in Nepal, 1996 and 2004: Changes and Socio-demographic,Spatial and Economic Determinants

Micro-data from national surveys indicate that economic inequality remained high and relatively unchanged in Nepal during the middle 1990s and early 2000s. Using household income and wealth as indicators, this study finds that many of the demographic characteristics, such as age, caste, ethnicity and widowhood, determined mostly along traditional social hierarchies, play influential roles in determining inequality in much of Nepal. In urban areas and especially in Kathmandu, however, these factors have proved increasingly less influential, replacing them with such factors as migration, education and labour market participation. These changes highlight the mechanisms through which different social groups are experiencing inequality, with important implications for the much needed economic, social and political stability of the country.