Human Capital and Poverty Lessening of Nepal: Vector Error Correction Model

Human capital is widely recognized as the fundamental basis for a nation's ability to maintain high standard of living. This paper aims evaluate Nepal's human and its impact on poverty reduction. The study utilizes time series data spanning from 1990 2021. To achieve objectives this research, Johansen cointegration, vector error correction model (VECM), Granger causality methods are employed. overall findings reveal that formation particularly effective significant in reducing Nepal short term. There strong evidence indicating investing health crucial sustainable However, education spending appears have only temporary effect alleviation Nepal. Additionally, demonstrates positive association with gross fixed formation, employment, enrollment, HDI, but not spending. It's important note covers limited observation period 32 years, proxies variables such reduction constrained. Nevertheless, research contributes by employing updated time-series address literature gap regarding relationship between effectively combat Nepal, government should need finance healthcare education. Simultaneously, policy emphasizing investment both be implemented, will contribute enhance quality life through employment income generation.